How to Select a Qualified Intermediary for a 1031 Exchange or Like-Kind Exchange
A 1031 exchange can be an important investment tool for preserving and building wealth. Many real estate investors use 1031 exchanges to defer capital gains and depreciation recapture taxes on the sale of investment properties, as well as trade up or add additional properties to their real property portfolios.
A Qualified Intermediary -- also called a 1031 Exchange Accommodator -- plays a pivotal role in the 1031 exchange process. From completing all the paperwork to ensure a compliant exchange to holding funds in escrow from the sale of relinquished assets, QIs are deeply involved in every step of the exchange process. Selecting the right Qualified Intermediary is essential to a smooth exchange, since any error or misstep could potentially disqualify the exchange and leave you facing a substantial tax liability.
We created this in-depth guide to help investors gain a better understanding of the role QIs play in the exchange process, as well as how to select a QI. We've included a wealth of information, including who can and can't act as your QI, ways to ensure your funds are safely held in escrow, and much more. Keep reading to learn about Qualified Intermediaries and how to select one for your 1031 exchange.