OUR QUALIFIED INTERMEDIARY SERVICES
A Qualified Intermediary (QI) is an essential role in every 1031 exchange. In 1991, the IRC Section 1031 regulations were updated to require the use of an impartial third party to hold funds when conducting the sale and purchase of real estate through a 1031 exchange. Thus, the role of the QI was born.
The Role of the QI
Why do you need a QI?
The key element in a successful exchange is that the taxpayer is not, at any time, in receipt of any portion of the funds from the sale of the relinquished property, otherwise, the exchange fails. The role of the Qualified Intermediary is to ensure the Internal Revenue Code Section 1031 states that "no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held for productive use in a trade or business or for investment." 1031 Exchange stays within compliance.
In order to do so, the QI holds the funds of the relinquished property and then transfers the funds for the purchase of the replacement property, all parties buy and sell via the QI, so the taxpayers are never in receipt of the funds.
What Does a QI Do?
Per a signed Exchange Agreement the QI conducts the following in relation to a Internal Revenue Code Section 1031 states that "no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held for productive use in a trade or business or for investment." 1031 Exchange :
- Acquires the relinquished property from the taxpayer and transfers the relinquished property
- Acquires the replacement property and transfer the replacement property to the taxpayer
- Additional responsibilities of the QI include:
- Structures the exchange in accordance with the IRS regulations
- Prepares the related documentation
- Safeguards proceeds from the sale of the relinquished property(s)
- Continuously monitors and advises the taxpayer to ensure compliance with federal and state 1031 and QI requirements
What our customers think about us
Marita is always super helpful and quick to answer any questions I have. I'm always impressed!
Excellent service by Accruit company. On time and very thorough.
I recently had the pleasure of working with Jonathan Barge and the team at Accruit on a complex reverse 1031 exchange transaction. From start to finish, their expertise, responsiveness, and attention to detail were truly exceptional. Reverse 1031 exchanges can be challenging, with many moving parts and strict deadlines that need to be managed. Jonathan and his colleagues skillfully guided me through each step of the process. They took the time to thoroughly explain how reverse exchanges work, addressed all my questions and concerns, and kept everything on track to ensure a smooth, successful exchange. It's clear that reverse exchanges are a specialty for Accruit. Their deep knowledge of the relevant tax codes, experience structuring these transactions, and proactive approach gave me full confidence that everything was being handled properly. Jonathan stayed on top of all the key dates and paperwork requirements so I could focus on my business goals. Thanks to the outstanding service from Jonathan and the Accruit team, I was able to complete my reverse 1031 exchange efficiently while fully deferring my capital gains taxes. I couldn't be happier with the outcome and highly recommend them to anyone considering a reverse exchange. They are true experts in this arena who know how to get the job done right.
Great Service from start to finish! My new property closed on time with no issues. Thank You Ellie T, my Senior Exchange Officer!
Attorney David Groener . Clear concise and detailed with information that was given. Kept the content simple and easy to understand. Both David and Marita were great and down to earth.
Accruit's QI Services
We Handle All Types of 1031 Exchanges, From Simple to Complex
Accruit is the leading independent 1031 Exchange Qualified Intermediary. With a team of 1031 Exchange Subject Matter Experts backed by patented technology, we are proud to offer best-in-class service on all types of 1031 Exchanges including:- Forward Exchanges
- Reverse Exchanges
- Built-to-Suit and Improvement Exchanges
- High-Volume Exchangers
- Multiple Buyers and Sellers
- Fractional Interests, Delaware Statutory Trusts (DSTs) and Tenants in Common (TICs)
- Seller-financed Transactions
- Properties held in Trusts or LLCs
- Multiple Relinquished and Replacement Properties
- Exchanges That Occur In Multiple States
The Accruit Difference
Years of Experience
Qualified Professionals, Attorneys, CPAs, and Certified Exchange Specialists® on Staff
Safety and Security of Exchange Funds
Fidelity Bonding and E&O Insurance
Patented 1031 Exchange Technology
Accruit developed and patented the only Internal Revenue Code Section 1031 states that "no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held for productive use in a trade or business or for investment." 1031 Exchange workflow technology Exchange Manager ProSM. The transfer of the relinquished property to the Qualified Intermediary, and the receipt of the replacement property from the Qualified Intermediary is considered an exchange. To be compliant with IRC Section 1031, the transaction must be properly structured, rather than being a sale to one party followed by a purchase from another party. Exchange Manager ProSM provides a standardized workflow with automated deadline reminders and document creation increasing efficiencies and reducing the potential for errors throughout the 1031 exchange process.
Dedication to the 1031 Exchange Industry
Regulatory Measures
- Qualified escrow and/or trust accounts for client funds
- Minimum bond and insurance requirements
- Fund withdrawal authorization requirements
- Registration and licensing requirements for QIs
- Investment limitations on exchange proceeds