Everyone knows you need a Qualified Intermediary (QI) to facilitate your 1031 tax-deferred exchange. Sure, the QI prepares your 1031 exchange agreement, coordinates with the closing agents and holds your exchange proceeds but a good QI does a lot more than that. Regardless of your role in the transaction, a good QI should be your partner throughout the exchange process and that includes the planning stage thru the tax reporting stage.
For the Exchanger, the QI should always be available to answer your questions and walk you through each step of the exchange. Your correspondences should be easy to understand and keep the transaction easy. A QI will keep you aware of your 45/180 day deadlines and alert you to any possible red flags. Traditional business hours, what’s that? Most questions don’t come up then.
For the real estate professionals, the QI will provide the exchange language for your Agreements of Sale and make it easy to get the earnest money deposit for the replacement property. A good QI can also provide resources so you can educate other sellers on the benefits of a 1031 exchanges and use this knowledge to grow your business.
For the closing agents, the QI should not only provide the instructions for closing but also be sure to review the closing statement prior to closing so any potential issues can be resolved before the actual closing.
For tax and legal advisors, a knowledgeable QI will call any red flags to your attention and even cite the section of the regs that you should review. 1031 CORP. also provides relevant tax cases to help our Exchanger and his advisors determine the best way to proceed.
Whatever your role in the exchange, the QI is your partner and working closely will keep the exchange process easier for all parties.