The Role of Qualified Intermediary (QI)
As per section 1031, a Qualified Intermediary or QI is essential to complete a 1031 property exchange successfully. The QI plays a very important role in a 1031 exchange and serves a variety of functions. The QI creates the exchange of properties, holds the proceeds and assists with the preparation of the legal documents required for a successful 1031 property exchange.
The Qualified Intermediary/QI is a person or firm that can legally hold proceeds to facilitate a 1031 exchange. The intermediary should not be a relative or agent of the exchanging party. As an exception, a real estate agent might serve as an QI if the current transaction is the only transaction in which the agent has represented the exchanging party over the last two years.
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