Choosing a qualified intermediary for a 1031 exchange requires two separate reviews: whether the proposed structure fits the federal deferred-exchange rules, and whether the intermediary’s identity, documents, fund-custody process, instruction controls, insurance or bonding representations, and escalation path satisfy your advisers and risk requirements. IRS instructions explain the QI’s exchange role and fixed deadlines; they do not endorse a specific firm or guarantee how that firm safeguards funds.
Start before the relinquished-property closing
Interview candidates while there is time for the taxpayer’s CPA and attorney to review the proposed exchange agreement, assignment steps, entity names, vesting, closing instructions, and disqualified-person questions. A rushed selection after proceeds are already payable can create tax and operational problems that an article cannot cure.
Verify the legal entity and responsible people
Confirm the QI’s legal name, physical address, responsible contacts, signing authority, service providers, and how to reach a supervisor or emergency contact. Independently verify contact information and document versions. Do not authenticate a wire change by replying to the message that announced it.
Ask how exchange funds are held and released
Request a plain-language explanation of account title, permitted institutions, segregation or commingling, authorized signers, dual-control or callback procedures, investment of balances, interest, fees, statements, disbursement approvals, and what happens if a bank, employee, or intermediary becomes unavailable. Have qualified advisers evaluate the answers and governing documents.
Test the instruction-change process
Ask exactly how original instructions are delivered, how changes are authenticated, which channel is independent, who confirms the recipient, and what happens when a request arrives near a deadline. FBI guidance supports secondary-channel verification for account changes. Urgency does not replace authentication.
Keep deadlines and property decisions separate
IRS Form 8824 instructions describe the 45-day written identification period and the 180-day or tax-return-due-date receipt limit, whichever is earlier. A vendor review, suspicious email, repair issue, financing delay, or internal approval does not automatically add exchange time. The QI, CPA, and attorney should control the exchange calendar.
Create a dated selection record
Keep candidate materials, adviser questions, signed agreements, fee schedules, custody explanations, insurance or bonding evidence supplied by the firm, contact verification, wire-control instructions, notices, statements, and escalation outcomes. Record what was verified, what was represented, what remains open, and who owns each decision.
FAQ
Does the IRS approve qualified intermediaries?
IRS guidance explains the QI role in a deferred exchange but does not provide an endorsement of a particular service provider. Evaluate the structure and the firm with your CPA, attorney, and other appropriate advisers.
What should I ask a 1031 qualified intermediary?
Ask about entity identity, experience and responsible contacts, exchange documents, fund custody, authorized signers, instruction changes, statements, fees, insurance or bonding representations, deadlines, and escalation.
Can a QI problem extend the 45-day or 180-day deadlines?
Do not assume so. IRS instructions provide the federal timing framework. Escalate operational problems immediately to the QI, CPA, and attorney without treating the problem as extra time.
Primary sources and limits
- FBI Internet Crime Complaint Center, Business Email Compromise
- FBI IC3, 2025 Internet Crime Report
- IRS, Instructions for Form 8824
General education only. A website, email, text, caller ID, attachment, portal message, social profile, estimate, contract, license screenshot, bank detail, title, badge, vehicle, testimonial, prior relationship, or urgent deadline does not by itself authenticate a person, company, professional status, payment instruction, account, mover, broker, carrier, qualified intermediary, or receiving agent. Verify the current identity, authority, regulator or institutional record, independently sourced contact path, documents, account-change process, recipient, scope, consent, deadlines, custody or payment controls, escalation owner, and written acknowledgement with the responsible financial institution, title or escrow company, carrier, regulator, brokerage, qualified intermediary, CPA, attorney, insurer, law-enforcement agency, or other qualified professional as appropriate. No individualized legal, tax, contract, engineering, environmental, lending, insurance, privacy, compliance, securities, or investment advice is provided. A CPA, attorney, and qualified intermediary must evaluate the exchange structure, taxpayer, title, deadlines, identification, receipt, basis, liabilities, boot, reporting, and vendor documents.
Related: organizing the exchange document file, separating financing work, start an exchange-property conversation.