Qualified Intermediary
The Qualified Intermediary (also known as an Accommodator or a QI) is a corporation that is in the full-time business of facilitating 1031 exchanges. The role of a QI is similar to, but not identical to, the role of an escrow company. The Qualified Intermediary is essential to completing a successful and valid delayed exchange.
Anyone who is related to the taxpayer, or who has had a financial relationship with them within the two years prior to the close of escrow of the exchange can not be used as the QI. This means that the taxpayer cannot use their current attorney, certified public accountant or real estate agent. A corporation or other entity to act as Qualified Intermediary owned by your CPA, CPA firm, real estate agent or attorney is likewise disqualified.
A Qualified Intermediary should be bonded and insured against errors and omissions and employee dishonesty. Relevant educational background such as tax, law or finance is desired. Nevada is the only state that requires a QI to be licensed.
Foot Note:A 1031 exchange is a method of buying and selling personal property where the transaction creates a tax deferral in the eyes of the IRS. The way it works is simple. You sell a property and then buy another property which qualifies as a "like-kind" exchange.
