What Is A QI?
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What Is A Qualified Intermediary?
A Qualified Intermediary is a neutral, third-party that facilitates the 1031 Exchange. Also sometimes referred to as an Accommodator, QI, or Facilitator. In most circumstances, the use of a Qualified Intermediary is required to successfully complete a 1031 Tax-Deferred Exchange. A professional and trustworthy Qualified Intermediary structures the 1031 Exchange safely and professionally. The QI facilitates the 1031 Exchange by acting as a trusted custodian – safely holding the taxpayer’s 1031 Exchange funds during the exchange process. A QI prepares the legal documents necessary to complete the exchange and assists the taxpayer with critical timelines involved in completing a successful exchange. GB 1031 Exchange guides the investor through the 1031 Exchange process and answers any 1031 Exchange questions.
Gibraltar 1031 Exchange must hold the exchange funds as a trusted custodian, ensure the transfer of property exchange, strictly adhere to the regulations set forth by the IRS, and prepare and provide legal documents to the exchangor.
Currently, there is no formal licensing, or regulatory body that monitors or regulates Qualified Intermediaries. It is important to know who to entrust with exchange funds and documentation. No government body, including the IRS, DFPI, or DOB, are monitoring the compliance and ethical practices of Accommodators. Therefore, it is imperative to do thorough due diligence by investigating the safety practices of the Qualified Intermediary to ensure funds will be safeguarded in every possible manner. You can rest assured that GB 1031 will always handle your 1031 Exchange with the utmost care, precautions and security. Learn more about the Safety and Security Gibraltar 1031 Exchange provides client.
Access To Funds
During the 1031 Exchange process, the taxpayer cannot directly access the funds. The IRS requires that the funds be held by a qualified intermediary, such as GB 1031, until they are used to acquire the replacement property. This is required by the IRS in order to ensure that the funds are not used for purposes other than the 1031 Exchange.
If the taxpayer attempts to access the funds themselves, or have any constructive receipt of the exchange funds, a taxable event will have been triggered and could result in a significant tax liability.
Gibraltar 1031 Exchange will safely and securely hold the funds in a segregated bank account and will only disperse the funds for use in the taxpayer’s 1031 Exchange purchase. GB 1031 will keep the taxpayer updated on the status of the exchange and provide the documentation the taxpayer will use when filing their taxes and keep for future records. Gibraltar 1031 will always provide the taxpayer peace of mind that the funds are held safely and securely.
