1031 Qualified Intermediary

A Qualified Intermediary (QI) — sometimes called an Accommodator — is an independent third party that holds the proceeds from the sale of your relinquished property and uses them to acquire your replacement property. The IRS requires a QI to facilitate a valid 1031 exchange because if you receive the sale proceeds directly, the exchange is disqualified and the gain becomes taxable.

Without a QI, you have constructive receipt of the sale proceeds, which voids the tax-deferral status of the exchange. The QI keeps the funds in a separate account, prepares the exchange agreement and assignments, and coordinates the closing of both the relinquished and replacement properties. This separation is what makes the like-kind exchange safe-harbor possible.

Standard 1031 Qualified Intermediary fees range from $850 to $1,500 for a forward (delayed) exchange. Reverse and improvement exchanges cost more because they require an Exchange Accommodation Titleholder (EAT) structure — typically $6,000 to $12,000. Universal Pacific 1031 maintains a flat-fee model with no junk charges. Pricing is finalized after a free consultation.

The QI prepares the exchange agreement, drafts the assignments of the relinquished and replacement property contracts, holds the sale proceeds in a segregated account, coordinates the closing schedule with title and escrow, monitors the 45-day identification and 180-day completion deadlines, and prepares the documentation your CPA needs for IRS Form 8824 at tax time.

The QI fee is typically paid at the closing of the relinquished property, deducted from the net sale proceeds before the funds are held in the exchange account. The funds for the replacement property purchase are then held until used to acquire the new property.

Look for a QI with: (a) at least one licensed CPA or attorney on staff, (b) Errors & Omissions insurance and a fidelity bond, (c) segregated client trust accounts (not co-mingled), (d) verifiable industry membership such as the Federation of Exchange Accommodators (FEA), and (e) transparent flat-fee pricing. Avoid QIs that hold funds in their operating accounts or have no written security protocols.

The terms are largely synonymous in the 1031 industry. “Qualified Intermediary” is the IRS’s formal term used in Treasury regulations under Section 1031. “Accommodator” is the older industry name. “Exchange Accommodation Titleholder” (EAT) is a specific role in reverse and improvement exchanges — it’s a separate legal entity that holds property title during the parking period.

No. Qualified Intermediaries are not federally licensed or regulated. This is why choosing a QI with strong professional credentials matters — licensed CPAs or attorneys on staff, E&O insurance, FEA membership, and segregated trust accounts are the only practical safeguards. Some states (California, Nevada, Colorado, Idaho, Oregon, Washington, Virginia, Maine) have state-level QI registration requirements.

No. The IRS disqualifies any party who has been your agent or representative within the two years before the exchange — that includes your CPA, attorney, real estate broker, and employees. A valid QI must be independent of those professional relationships. We work closely with your existing CPA and attorney without compromising the QI independence requirement.

Your funds are held in a separate, fully segregated trust account (never co-mingled with our operating funds) at a major institutional bank. We carry Errors & Omissions insurance and a fidelity bond, are verified members of the Federation of Exchange Accommodators, and have licensed CPAs on staff. Daily reconciliation reports and full audit trails are available on request.