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Trusted Qualified Intermediaries for Secure 1031 Exchanges

A competent and trustworthy qualified intermediary (QI) is critical for a successful 1031 exchange. Technically, anyone can serve as a 1031 qualified intermediary unless they have been disqualified from the role, and there are no federal regulations of qualified intermediaries. 

This does not mean that their work will be excellent and acceptable, because there are many complications with 1031 exchanges. It’s best to choose someone with experience in the specific kinds of 1031 exchange you want to undertake, with high levels of customer service, who will handle your funds securely, and who will ensure compliance with all legal requirements. Read on for tips on selecting a truly qualified QI, and how we at 1031 Pros would love to help with your exchange. 
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Role of a Qualified Intermediary in 1031 Exchanges

One of the most important elements of a winning exchange is that the property holder (who is also the potential taxpayer) is not in receipt of any of the funds from the sale of a relinquished property, at any time before the exchange is complete. If this happens, then the exchange will fail. That’s where a great 1031 exchange qualified intermediary comes in: they hold the funds and park properties until the exchange is finished. 


Another key consideration is that every kind of 1031 exchange comes with its own regulations, whether it be a traditional, reverse, new construction, improvement, partial, or even vacation home exchange. It’s wise to find a QI who can expertly facilitate the exact kind of exchange you want to undertake, based on years of experience. 

Services Provided by Qualified Intermediaries

Your QI will prepare the 1031 Exchange Agreement and all relevant notices, provide examples of the best language to include in contracts, set up a unique and secure transaction account for each exchange, coordinate transactions, deliver regular account statements, work with title companies, and prepare tax reporting statements. 

If any of these are not done correctly, it can derail your 1031 exchange and the transaction will be treated as a taxable sale with a purchase following. 

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Legal Obligations and Safeguards

Under IRS regulations, your QI must safeguard exchange funds, ensure proper documentation at every step of the way, and act as an independent party in the transaction. The best 1031 qualified intermediaries always deposit the funds from an exchange into a separate and unique FDIC-insured account, have 100% transparent reporting practices, and adhere to strict ethical standards regarding handling funds. 


They will assist with adherence to the very important deadlines – 45 days for you to identify a replacement property after the sale of your relinquished property, and 180 days to complete the exchange. If either of these deadlines are not met, you will be liable for capital gains taxes. 

Selecting the Right Qualified Intermediary

Not all qualified intermediaries are equal. You want to find one who can advise you on which kind of 1031 exchange to undertake and with experience in that specific type of exchange. At 1031 Pros, we have successfully completed more than 18,000 1031 exchanges of all types and work in all 50 states in the U.S. – always with a strong focus on compliance and meticulous attention to detail in every transaction.


We also go beyond the official duties of a QI, giving you access to a network of property management and real estate advisors after your exchange, and helping you create long-term investment strategies. 


When selecting a qualified intermediary, be sure to read customer reviews and testimonials and select one that answers the phone when you call, no matter what time, and responds to emails within 24 hours. 1031 Pros is that qualified intermediary, and we will bring you the fastest, most reliable, transparent, and secure 1031 exchange experience that you have ever had.

Verify Credentials and Ensuring Compliance with Industry Standards

Look for a QI who has a proven track record of safeguarding client assets. Ensure that they are appropriately licensed, fully bonded, insured, and member of the Federation of Exchange Accommodators. Also, it’s a good idea to request professional references for any potential qualified intermediary and review them to corroborate any claims that they make of expertise. 

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Common Misconceptions About Qualified Intermediaries

Legal and Tax Advice
1031 exchange qualified intermediaries are not legal or tax advisors. However, a good QI will work hand in hand with your attorney and tax advisor to ensure a comprehensive and compliant exchange strategy. 

Investing of Exchange Funds
It is inappropriate for QIs to use your exchange funds for any purpose other than your exchange; this would compromise the integrity and security of your investment. That’s why we put them into a unique, individual account that is secured with dual signature requirements. At 1031 Pros, we don't move your money until you tell us to. 

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Risks of Not Using a Qualified Intermediary

If you do not use an expert, trustworthy QI for your 1031 exchange, you run the risk of having the exchange be invalidated, leading to immediate tax liabilities. At 1031 Pros, we carefully and thoughtfully oversee each step of the exchange, ensuring complete compliance with all applicable regulations. 

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Whether you're ready to sell today or in the future, we are happy to answer any questions you may have about your real estate portfolio.


Reach out to learn how we can help save you money and grow your portfolio.

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  • What type of property qualifies for a 1031 exchange?
    Any property held for productive use in a trade or business or for investment can be exchange for like-kind property. "Like-kind" refers to the nature of the investment. Any type of real property can be exchanged for another type of real property. For example: A single family rental can be exchanged for a duplex. Raw land can be exchanged for a shopping center or an office space for apartments. Any combination will work. This gives the investor flexibility to change investment strategies to fulfill their portfolio needs.
  • What Does Not Qualify?
    A personal residence, developed lots, home flipping, partnership interests or property held for resale immediately after acquisition. Second homes may or may not qualify depending upon the use and how it's reported for income tax purposes.
  • What kind of exchanges does 1031 pros handle?
    We handle all types of exchanges: Delayed Exchanges, Reverse Exchanges and Build to Suit Exchanges. From the simple to the complex, we can handle any type of exchange.
  • Does 1031 Pros handle exchanges in any state?
    Yes. We can handle exchanges for any property in any of the 50 states.
  • How much notice do I need to do a 1031 Exchange?
    You can do a 1031 exchange any time before closing on the sale of your investment property. Like we said before, we're fast.
  • How long do I need to own my investment property before I can exchange it for another?
    There is no set timeline, but to avoid any issues you should at least own it for a minimum of 12 months.
  • What happens if I don't close on my replacement property within 180 days?
    Then you just pay the capital gain taxes like your would have if you were to sell the property in the first place.
  • Can I sell one property and exchange into multiple properties?
    Yes, in most cases you can exchange into three other properties.
  • Why should I use a qualified 1031 intermediary to do my exchange?
    We will prepare all the correct paperwork you will need to file your taxes with. We will also ensure you meet your timelines and any other specifics of the 1031 tax code.
  • What if my Title company is a qualified 1031 intermediary?
    1031 Pros specializes in exchanges and has the expertise, experience and history to ensure an audit free exchange.
  • What is a reverse exchange?
    A reverse exchange is when you close on the purchase of the replacement property before you close on the sale of the relinquished property. Many real estate investors will utilize a reverse exchange to acquire a replacement property in a market where there may be competing offers or there is a need to close fast. Because of our vast experience handling these types of exchanges, we offer very competitive rates and are willing to match any competitor pricing.
  • What is an improvement exchange?
    Also referred to as a construction exchange or build-to-suit exchange, improvement exchanges offer real estate investors nice benefits, which often result in better investment opportunities than properties readily available on the market. The ability to remodel, add capital improvements, or build from the ground up, while using tax-deferred dollars, allows an investor to reinvest in a replacement property that meets their exact investment criteria.
  • What is the Federation of Exchange Accommodators?
    The Federation of Exchange Accommodators (FEA) is the only national trade association organized to represent professionals who conduct like-kind exchanges under Internal Revenue Code §1031. Members include Qualified Intermediaries (QIs), their primary tax and legal counsel, and affiliated industries (TIC sponsors, banks, real estate brokers, title companies, settlement/escrow agents, etc.). 1031 Pros is a proud member of the FEA.
  • Can I 1031 exchange into a Tenancy in Common or Triple Net Lease Property?
    Yes, you can exchange into a Tenant In Common (TIC) or Triple Net Lease real estate investments. The biggest rule of thumb is that your name is on the title as an owner with a percentage of ownership. These types of real estate investments offer a great passive income for those who are done with being a landlord and are ready to sit back and collect a monthly check. We do not offer these types of investments at 1031 Pros, but we have some great partners who do. Call us today to learn more.
  • Does my personal residence qualify for a 1031 exchange?
    No, it does not. Personal residences qualify for different tax benefits under IRS Code Section 121. Section 121 allows a taxpayer to exclude up to $250,000 ($500,000 for certain taxpayers who file a joint return) of the gain from the sale (or exchange) of property owned and used as a principal residence for at least two of the five years before the sale. 1031 Pros does not offer any services or tax advice for personal residences. Please contact our trusted Accounting partners under the "More Tab" for more information on Section 121. Tell them 1031 Pros sent you!
  • Are my funds insured?
    Each of our exchanges uses a unique, individual, FDIC insured account. 1031 Pros also has additional bonding and insurance, so your funds are always safe and secure.

Have More Questions? Send Us a Message.

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