Do I need a Qualified Intermediary for a 1031 exchange?
Yes. For virtually every 1031 exchange you must use a Qualified Intermediary (QI). By law you cannot take receipt of your own sale proceeds and still defer the tax, so a neutral QI holds the money between the sale and the purchase. The QI must be engaged and the paperwork signed before your sale closes — you cannot add one afterward.
The QI can’t be you, your spouse or close relatives, or anyone who has acted as your agent (your attorney, accountant, or real-estate broker) within the last two years. That independence is what keeps the funds outside your constructive receipt.
Practically, the QI prepares the exchange agreement, instructs the closing to send proceeds to escrow instead of to you, holds the funds, and then releases them to buy your replacement property. Learn more about the qualified intermediary role, or start an exchange.
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General education — not tax or legal advice. This explains how §1031 exchanges work in general terms and uses simplified assumptions. Rules and tax rates change and your situation is specific. Talk to a qualified CPA or tax attorney before you rely on any of it. See our full terms & legal notice.