Do you have to have a Qualified Intermediary for your 1031

Do you have to have a Qualified Intermediary for your 1031 exchange?

Before you can sign off on any 1031 exchange you must have a Qualified Intermediary, this is an absolute necessity. Using a Qualified Intermediary is the only way for you to guarantee your safety in this entire transaction, yours and the other parties. With this intermediary you will both know that you are not getting taken for a ride, without a Qualified Intermediary you would be taking an enormous risk that no one can afford to take. Think of the Qualified Intermediary as your safe harbor.

For a Section 1031 exchange to be complete the taxpayer, you, will have to have control of the money and the property generated by the exchange. This is what is known as constructive receipt. And before you can get this kind of control there are some requirements that you must meet. These requirements have been put in place by the IRS.

You see, the money will be given to the Qualified Intermediary, not you, and it is this Qualified Intermediary that will then use the money to acquire the new land. In fact they will give the money straight to the closing agent. This is a safe and predictable way for the entire 1031 exchange to go down. In this manner no one is getting taken advantage of or ripped off.