1031 Exchange Qualified Intermediary Services
Navigating a 1031 Exchange can be complex. Our team offers a clear, organized process and secure fund handling, with personalized support from initiation through completion.
What is a 1031 exchange?
A 1031 exchange allows real estate investors to sell a property and reinvest the proceeds into a new purchase and defer capital gains taxes.
Why Do You Need a Qualified Intermediary (QI)?
A Qualified Intermediary (QI) is required to complete a 1031 exchange under IRS regulations. Without a QI, the transaction is treated as a taxable sale, and the taxpayer cannot defer recognition of gain under Section 1031.
The IRS requires the taxpayer (the “Exchanger”) to engage a QI to hold the exchange proceeds and to facilitate the transfer of the relinquished property and the acquisition of the replacement property. The QI serves as an independent third party so the taxpayer does not take actual or constructive receipt of the funds during the exchange process.
What Does a 1031 Qualified Intermediary Do?
A Qualified Intermediary (QI) facilitates the administrative steps required for a 1031 exchange. The QI’s role is to hold exchange proceeds and manage documentation, so the taxpayer does not take actual or constructive receipt of funds during the exchange.
Holds the proceeds from the sale of the relinquished property in a segregated account in accordance with IRS requirements.
Prepares and manages the exchange documentation, including the Exchange Agreement and Assignment Notices.
Coordinates the transfer of the relinquished property and the acquisition of the replacement property.
Disburses funds for the replacement property in a manner consistent with IRS rules, without placing the proceeds under the taxpayer’s control.
Provides information about IRS timelines, including the 45-day identification period and 180-day exchange period, so the taxpayer can track required deadlines.
*A QI does not provide tax, legal, or accounting advice. Taxpayers should consult their own qualified professionals regarding their specific circumstances.
Why Consider a 1031 Exchange?
A 1031 exchange may offer several potential tax and portfolio management benefits, depending on the taxpayer’s circumstances and the characteristics of the replacement property.
- Deferral of Federal & State Capital Gain Taxes (subject to IRS requirements)
- Deferral of Depreciation Recapture Tax
- Ability to Reposition a Real Estate Portfolio
- Opportunity to Diversify by Location or Property Type
- Ability to Consolidate or Relocate Real Estate
- Leverage Flexibility
- Reduced Property Management Burden (via DST)
- Potential Cash Flow Changes
- New Depreciation Schedule on Replacement Property
*A 1031 exchange does not guarantee improved performance, increased cash flow, or tax outcomes. Taxpayers should consult their own qualified tax and legal professionals.
Property Types
Commercial
Industrial
Agriculture
Mixed Use
Retail
Office
Rental and Vacation Homes
Hotels
Multifamily
Types of 1031 Exchanges
Not all 1031 exchanges follow the same structure. The appropriate exchange format depends on the taxpayer’s circumstances and the characteristics of the properties involved.
Delayed Exchange
Sell First, Buy Later
The most common 1031 exchange structure. The taxpayer sells the relinquished property first, then identifies and acquires a replacement property within IRS timelines. A Qualified Intermediary (QI) holds the proceeds and facilitates the required documentation and assignments.
Reverse Exchange
Buy First, Sell Later
A reverse exchange allows the taxpayer to acquire the replacement property before selling the relinquished property. This structure involves additional administrative steps and requires the use of an Exchange Accommodation Titleholder (EAT) under IRS guidelines. A QI coordinates documentation and timing requirements.
Improvement Exchange
Use Exchange Funds to Improve Property
Also known as a Build-to-Suit Exchange, this structure allows exchange proceeds to be used for improvements on the replacement property while it is held by an EAT. The QI facilitates documentation and tracks required timelines in accordance with IRS rules.
Multi-Asset / Portfolio Exchanges
Exchange Involving Multiple Properties
A Multi-Asset or Portfolio Exchange involves the sale and/or purchase of multiple properties within a single exchange. These exchanges require detailed coordination and adherence to IRS identification and timing requirements. A QI assists with documentation and the sequencing of transfers.
*A Qualified Intermediary does not provide tax, legal, or accounting advice. Taxpayers should consult their own qualified professionals regarding their specific circumstances. Exchange structures must comply with IRS rules, and outcomes depend on individual facts and timing.
Sell Vs Exchange
Real estate owners have several options when deciding whether to sell a property or pursue a tax-deferred exchange under Section 1031. A 1031 exchange may allow taxpayers to defer recognition of gain when specific IRS requirements are met, which can be an important consideration when evaluating long-term real estate strategies.
A tax-deferred exchange is one of several tools available to reposition or consolidate real estate holdings, diversify property types or locations, or transition into different management structures. Whether a 1031 exchange is appropriate depends on the taxpayer’s individual circumstances, objectives, and tax considerations.
You may use our calculator to estimate the potential amount of capital gain that could be deferred in a 1031 exchange based on the information you provide. Actual tax outcomes depend on each taxpayer’s specific situation.
*A 1031 exchange does not guarantee tax deferral or improved financial outcomes. Taxpayers should consult their own qualified tax and legal professionals.
Sell vs Exchange Calculator
1031 Exchange Tax Calculator — compare taxable sale vs. 1031 exchange net equity
Property details
Tax impact comparison
For informational purposes only. Not tax advice. Consult a qualified tax professional for your situation. NII tax applies when modified AGI exceeds $200k (single) / $250k (married).
For informational purposes only. This calculator provides estimates based on the inputs you provide and does not guarantee tax outcomes.
A 1031 exchange may or may not qualify for tax deferral depending on the taxpayer’s specific facts, timing, and compliance with IRS rules.
This tool does not provide tax, legal, or accounting advice. Taxpayers should consult their own qualified professionals.
The Net Investment Income Tax (3.8%) applies when modified adjusted gross income exceeds $200,000 (single) or $250,000 (married filing jointly).
How to Start Your 1031 Exchange
60 Days Before Sale
Speak with an Exchange-X representative about the 1031 exchange process.
30 Days Before Sale
Browse available 1031-eligible replacement properties on Exchange-X.
7-30 Days Before Sale
Open an account with your Qualified Intermediary (QI) before the sale of your property.
Day Of Sale
Your 45-day identification period and 180-day exchange period begin.
45 Days After Sale
Identify potential replacement property(ies) in accordance with IRS rules.
180 Days After Sale
Complete the acquisition of the identified replacement property(ies).
Why Choose Us as Your 1031 Qualified Intermediary
When it comes to protecting your gains, you need a partner you can trust. Here’s why investors across all 50 states choose Exchange-X.
Compliant with IRS Guidelines
We strictly follow the Regulations to ensure your exchange meets all legal requirements.
Fast & Secure Escrow Handling
Exchange funds are held in segregated, insured escrow accounts ensuring total transparency and safety.
Experienced Exchange Coordinators
Our team has helped navigate complex exchanges, including Delayed, Reverse, and Improvement exchanges
Dedicated Support
Our dedicated support team is here for you.
Nationwide Service
1031 Qualified Intermediary is nationally recognized with a presence in all 50 states.
FEA Member
We are a proud member of the Federation of Exchange Accommodators.
Industry Experts
We know 1031 exchanges.
Full Transparency
Full Transparency on Every Exchange
Get Information. Understand the Process. Plan Your Exchange.
A 1031 exchange involves specific IRS rules and timelines. During your consultation, a member of our team can explain how the exchange process works, outline key deadlines, and address general questions about the administrative steps involved.
Whether you’re exchanging one property or several, we provide information about IRS requirements, documentation, and how exchange proceeds are held and disbursed in accordance with applicable rules.
- You'll Learn About:
- The steps involved in a 1031 exchange
- IRS identification and closing timelines
- The different exchange structures available under IRS guidelines
- How exchange proceeds are handled.
- Considerations that may affect tax deferral under Section 1031
- *Note: A Qualified Intermediary does not provide tax, legal, or accounting advice. Taxpayers should consult their own qualified professionals regarding their specific circumstances.
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Frequently Asked Questions
What is a 1031 Exchange?
A: A 1031 Exchange, also called a like-kind exchange, allows a taxpayer to defer capital gains taxes on the sale of a business or investment property (relinquished property) by reinvesting the proceeds into another qualifying business or investment property (replacement property) of a “like-kind.” The tax is deferred, not eliminated.
Want to learn more?
Schedule a free consultation with our team today to learn more.
Who is a 1031 Qualified Intermediary?
Do I need a Qualified Intermediary to do a 1031 Exchange?
A: Yes. IRS regulations require the use of a third-party Qualified Intermediary to ensure the exchanger does not take possession of the sale proceeds.
What is "Like-Kind" in a 1031 Exchange?
A: In 1031 exchanges, the term “like-kind” is broadly interpreted. “Like-kind” pertains to real property, regardless of its use. For example, you can exchange a rental home for vacant land or a commercial building. Consult with a 1031 Qualified Intermediary advisor for more details.
Want to learn more?
Schedule a free consultation with our team today to learn more.
What are the 1031 Exchange identification rules?
A: The IRS has three rules for identification:
1. Three-Property Rule: You can identify up to three properties regardless of their fair market value.
2. 200% Rule: You can identify more than three properties, provided their aggregate fair market value doesn’t exceed 200% of the relinquished property’s value.
3. 95% Rule: You can identify an unlimited number of properties, but you must acquire at least 95% of the total fair market value of all identified properties.
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Schedule a free consultation with our team today to learn more.
What is the 45-day identification period?
A: IRS regulations require the exchanger identify replacement property (or properties) 45 calendar days from the sale of the relinquished property. A formal document must be signed and submitted by midnight of the 45th day.
Want to learn more?
Schedule a free consultation with our team today to learn more.
What happens if I miss the 45-day identification period?
A: The exchange becomes invalid, and the gain becomes taxable. There are no extensions except in federally declared disasters.
Want to learn more?
Schedule a free consultation with our team today to learn more.
What is the 180-day closing date?
A: IRS regulations require the exchanger close on the replacement property (or properties) within 180 calendar days from the sale of the relinquished property. There are no exceptions to this deadline and could result in a failed exchange.
Want to learn more?
Schedule a free consultation with our team today to learn more.
What happens if I miss the 180-Day Closing Deadline?
A: The exchange becomes invalid, and the gain becomes taxable. There are no extensions except in federally declared disasters.
Want to learn more?
Schedule a free consultation with our team today to learn more.
How much do I need to reinvest to defer all taxes??
A: To defer all capital gains tax, you must purchase a replacement property that is of equal or greater value than the relinquished property, and you must reinvest all of the net equity/cash proceeds. You must also have equal or greater debt on the replacement property, or offset the debt reduction with new cash equity.
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Schedule a free consultation with our team today to learn more.
What types of properties qualify for a 1031 exchange?
A: Any real property held for business or investment purposes—including land, rental homes, commercial buildings, and more. Personal residences do not qualify.
Do I earn interest on my 1031 Exchange funds while they're held?
A: Yes. Your exchange proceeds are placed in secure, interest-bearing escrow accounts, and in many cases, you may be eligible to receive a portion of the interest earned during the exchange period. This benefit is typically reserved for large-scale or institutional investors—but we make it accessible for individual exchangers too.
Want to know how it works in your case?
Schedule a free consultation with our team today to learn more.
What is leftover "boot" from a property sale?
A: Boot is non-like-kind property or cash received by the taxpayer in the exchange. The most common forms are cash boot (any net cash proceeds not reinvested) or mortgage boot (receiving less debt on the replacement property than was paid off on the relinquished property). Boot is taxable to the extent of any realized gain on the sale.
Want to learn more?
Schedule a free consultation with our team today to learn more.
Can I sell a single property and buy multiple properties, or vice-versa?
A: Yes. You can exchange one relinquished property for multiple replacement properties (or vice-versa), as long as you comply with the identification and valuation rules. This is often done for purposes of diversification or consolidation.
Want to learn more?
Schedule a free consultation with our team today to learn more.
Is a 1031 Exchange a tax-free event?
A: No, a 1031 Exchange is tax-deferred, not tax-free. The capital gains are simply postponed until a future taxable event, such as when the replacement property is eventually sold without another exchange. However, if the investor holds the replacement property until death, the deferred gain may be permanently eliminated through a step-up in basis for their heirs.
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Schedule a free consultation with our team today to learn more.
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