In the regulations, the qualified intermediary is deemed to not be the agent of the taxpayer. If you’re going to pick somebody to do something specific for your 1031 exchange, the qualified intermediary is probably the safest party to interact with. If you need a surrogate to buy the replacement property first in a reverse exchange, your best friend from High School is not the best person to do that for you because they will likely be deemed as your agent. On the other hand, a qualified intermediary is not considered your agent.
Who do you want to have purchase your replacement property and park it for up to 180 days while you go about selling your relinquished property? The 1031 intermediary.
Who do you want to take title to your property while you have improvements constructed on that property? The qualified intermediary.
This is the safest bet to protect the legitimacy of your 1031 exchange.
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
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