YOU MUST USE A QUALIFIED INTERMEDIARY

As stated by the IRS, a Qualified Intermediary must be used in every exchange, even if the Taxpayer has identified a replacement property prior to selling the old property.

The Qualified Intermediary acts as the non-biased third party during an exchange transaction. The intermediary holds all funds and prepares any necessary documentation pertinent to the exchange. If at any time the IRS feels that the Taxpayer has been in direct contact with the proceeds from the sale of the relinquished property, the exchange will be disallowed.

During an exchange, the Qualified Intermediary could possibly be dealing with millions of dollars. It is crucial that an investor chooses a company that is financially sound.