Definition
The qualified intermediary holds sale proceeds during 1031 exchanges, required to maintain tax-deferred status. The seller cannot have access to funds.
Not sure where this fits?
Answer a few questions and we’ll open the path that fits, at the right step.
Find my pathAbout this term
The seller cannot have access to sale proceeds during a 1031 exchange; a qualified intermediary holds the funds. The intermediary must be independent (not the seller's agent, attorney, accountant, or related party). Failure to use a qualified intermediary disqualifies the exchange from tax-deferred treatment.
Pro Tip
Never take control of exchange funds. Always go through qualified intermediary.
Example
After selling property for $400,000, the buyer's funds go directly to the qualified intermediary, not to the investor