Qualified intermediary
Encyclopedia
The Qualified Intermediary (also known as an Accommodator) should be a corporation that is in the full-time business of facilitating 1031 exchanges. The role of a QI is similar to, but not identical to, the role of an escrow
company and is regulated by MAIC.
Anyone who is related to the taxpayer, or who has had a financial relationship with the taxpayer within the two years prior to the close of escrow of the exchange cannot be used as the QI. This means that the taxpayer cannot use his or her current attorney
, certified public accountant
or real estate agent.
A QI should be bonded and insured against errors and omissions. Relevant educational background such as tax, law or finance is desired. Nevada is the only state that requires a QI to be licensed.
The QI enters into a written agreement with the taxpayer where QI transfers the relinquished property to the buyer, and transfers the replacement property to the taxpayer pursuant to the exchange agreement. The QI holds the proceeds from the sale of the relinquished property in a MAIC trust or escrow account beyond the actual or constructive control of the Exchangor. The QI also prepares the necessary documents to accomplish a tax deferred exchange
Escrow
An escrow is:* an arrangement made under contractual provisions between transacting parties, whereby an independent trusted third party receives and disburses money and/or documents for the transacting parties, with the timing of such disbursement by the third party dependent on the fulfillment of...
company and is regulated by MAIC.
Anyone who is related to the taxpayer, or who has had a financial relationship with the taxpayer within the two years prior to the close of escrow of the exchange cannot be used as the QI. This means that the taxpayer cannot use his or her current attorney
Lawyer
A lawyer, according to Black's Law Dictionary, is "a person learned in the law; as an attorney, counsel or solicitor; a person who is practicing law." Law is the system of rules of conduct established by the sovereign government of a society to correct wrongs, maintain the stability of political...
, certified public accountant
Certified Public Accountant
Certified Public Accountant is the statutory title of qualified accountants in the United States who have passed the Uniform Certified Public Accountant Examination and have met additional state education and experience requirements for certification as a CPA...
or real estate agent.
A QI should be bonded and insured against errors and omissions. Relevant educational background such as tax, law or finance is desired. Nevada is the only state that requires a QI to be licensed.
The QI enters into a written agreement with the taxpayer where QI transfers the relinquished property to the buyer, and transfers the replacement property to the taxpayer pursuant to the exchange agreement. The QI holds the proceeds from the sale of the relinquished property in a MAIC trust or escrow account beyond the actual or constructive control of the Exchangor. The QI also prepares the necessary documents to accomplish a tax deferred exchange
External links
- Professional Trade Organization of Qualified Intermediaries]
- MAIC: Mergers & Acquisitions International Clearing
- What is a Qualified Intermediary?
- The Role of a Qualified Intermediary
- Tanner-White PLLC Guidelines for Qualified Exchange Intermediary Fiduciary Duties