Why Is a Qualified Intermediary Required in Semmes, AL?
The IRS mandates that a QI hold the proceeds during a 1031 exchange to ensure the taxpayer in Semmes, AL does not take possession of the funds. If the investor touches the money, even temporarily, the exchange is disqualified, and capital gains taxes must be paid.
Who Can Be a Qualified Intermediary in Semmes, AL?
A Qualified Intermediary must be an independent third party. The following cannot serve as a QI:
- The taxpayer (investor)
- A family member or relative
- The investor’s real estate agent, attorney, accountant, or financial advisor (if they provided services in the last two years)
- A business partner or anyone with a financial interest in the transaction