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A Qualified Intermediary, sometimes called an accommodator, is a required party in a delayed 1031 exchange for investors in Fort Worth, Texas who want to defer federal capital gains tax under Secti...
A Qualified Intermediary, sometimes called an accommodator, is a required party in a delayed 1031 exchange for investors in Fort Worth, Texas who want to defer federal capital gains tax under Section 1031. Without a Qualified Intermediary, an investor who sells a relinquished property and later buys a replacement property is generally treated as having constructively received the sale proceeds, which disqualifies the exchange even if the investor genuinely intended to reinvest in like kind property. The Qualified Intermediary steps into the transaction, receives the sale proceeds directly from closing rather than the investor, and holds those funds until they are used to acquire the replacement property, which keeps the investor from ever having actual or constructive control over the exchange proceeds.
The Internal Revenue Service places restrictions on who may serve as a Qualified Intermediary. A disqualified person generally includes the investor, the investor's agent, and anyone who has acted as the investor's employee, attorney, accountant, investment banker, broker, or real estate agent within the two year period before the exchange, with narrow exceptions for services related only to the exchange itself. Investors in Fort Worth, TX should engage a Qualified Intermediary before the relinquished property closes, because the exchange agreement and assignment documents generally need to be in place at or before that closing in order for the transaction to qualify as an exchange rather than a straight sale.
Beyond holding exchange funds, a Qualified Intermediary typically prepares the exchange agreement, receives the assignment of the purchase and sale contracts for both the relinquished and replacement properties, and serves as the recipient of the investor's written identification during the forty five day period. Investors in the Dallas Fort Worth metroplex should confirm how their Qualified Intermediary holds exchange funds, since funds are typically placed in a qualified escrow or qualified trust account for security. Selecting a Qualified Intermediary and confirming these procedures early in the transaction timeline helps investors keep the exchange structured correctly from the relinquished property closing through the acquisition of replacement property within the one hundred eighty day period.
Explanation of why a Qualified Intermediary is required for a delayed exchange
Overview of disqualified person restrictions under Treasury regulations
Guidance on exchange agreement and assignment document timing
Explanation of qualified escrow and qualified trust fund holding
Investors in Fort Worth, TX selecting a Qualified Intermediary before closing on a relinquished property
Investors confirming whether a prior advisor is disqualified from serving as their Qualified Intermediary
Investors coordinating exchange agreement paperwork ahead of a scheduled closing date
A Qualified Intermediary is required so the investor never receives or controls the sale proceeds directly. If an investor in Fort Worth, TX received the funds personally, even briefly, the transaction would generally be treated as a taxable sale rather than a tax deferred exchange under Section 1031.
A disqualified person generally includes the investor, the investor's agent, and anyone who served as the investor's employee, attorney, accountant, broker, or real estate agent within the two year period before the exchange, subject to narrow exceptions for exchange related services only.
Investors should engage a Qualified Intermediary before the relinquished property closes. The exchange agreement and assignment documents generally need to be signed at or before closing for the sale to qualify as part of a 1031 exchange rather than a standard sale.
Exchange funds are typically held in a qualified escrow account or qualified trust account rather than in the Qualified Intermediary's general operating accounts. Investors in Fort Worth, TX should confirm these account arrangements before authorizing the closing of the relinquished property.
A Qualified Intermediary generally prepares the exchange agreement and the assignment of the purchase and sale contracts for the relinquished and replacement properties, and receives the investor's written identification of replacement properties during the forty five day period.
Switching a Qualified Intermediary mid exchange is generally difficult once the exchange agreement is signed and funds are held. Investors should confirm the Qualified Intermediary's stability, insurance coverage, and fund handling procedures before the relinquished property closes, rather than after the exchange has already started.
Example of the type of engagement we can handle
Service Type
Qualified Intermediary Coordination Guidance
Location
Fort Worth, TX
Scope
Educational guidance on Qualified Intermediary selection and exchange agreement timing ahead of a relinquished property closing
Client Situation
An investor in Fort Worth, TX had a relinquished property closing scheduled and needed to confirm Qualified Intermediary requirements before signing closing documents.
Our Approach
We reviewed the disqualified person rules, confirmed exchange agreement timing with the investor's chosen Qualified Intermediary, and coordinated document delivery ahead of closing.
Expected Outcome
The investor closed on the relinquished property with a properly structured exchange agreement in place, preserving eligibility for tax deferral under Section 1031.
Contact us to discuss your situation in Fort Worth, TX. We can share references upon request.
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Identification rules
These rules protect exchange buyers in Fort Worth, TX. Each option is valid when you follow the written delivery requirements outlined by your Qualified Intermediary.
Three property rule
Name up to three properties of any value. Provide full legal descriptions and keep backups of delivery receipts.
Two hundred percent rule
Name more than three properties as long as aggregate fair market value stays under 200 percent of the relinquished price.
Ninety five percent rule
Identify any number of assets and close on at least 95 percent of the total value you listed.
Educational content only. Not tax, legal, or investment advice.
Our team is ready to help you navigate the 1031 exchange process with confidence.
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