A qualified intermediary is supposed to be somebody who is neutral and unbeholden to the taxpayer conducting the 1031 exchange. So it cannot be a related party such as your employees, your agents, your relatives, or people you’re in business arrangements with (such as your partners). The related party rules specify that you can’t do a 1031 exchange with someone that is under your sway. The qualified intermediary has to be a neutral and unbeholden party. The industry is such that certain companies that have developed a specialty in 1031 exchanges have developed over time and hold themselves out as a qualified intermediary, but it’s basically an unlicensed and unregulated industry as a whole. So basically anyone can hold out their hat and claim to be a qualified intermediary.
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
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