Does the IRS license Qualified Intermediaries?

The IRS regulations define who can serve within the QI safe harbor and who is disqualified, but the IRS does not choose or recommend your provider. State requirements and private credentials vary, so verify the firm's actual controls and coverage.

Should I choose the lowest QI fee?

Not by itself. Compare the total fee, but give greater weight to fund custody, wire controls, experience, responsiveness, and the contract terms because the proceeds and exchange deadlines are at stake.

When should I hire the QI?

Before the relinquished-property closing and before you receive or control the sale proceeds. Ideally, compare firms as soon as a sale is being planned or goes under contract.

Choosing a provider

How to choose a Qualified Intermediary

By the 1031.com editorial team · Published September 15, 2026 · Updated September 16, 2026

The short answer

Choose a Qualified Intermediary by examining how exchange funds are held and released, who can authorize transfers, what insurance and continuity controls exist, and whether the team regularly handles your exchange type. Price matters, but safeguarding the proceeds and meeting the deadlines matter more.

A Qualified Intermediary may hold a large portion of your sale proceeds while strict federal deadlines run. That makes the selection more consequential than comparing a base fee or choosing the first name referred by a closing agent.

The IRS defines the QI's role in the exchange safe harbor, but it does not select or endorse a firm for you. Use the questions below to understand the actual people, accounts, and controls behind the contract.

Two professionals reviewing printed documents at a conference table. — Educational context only. The property or people shown are not a recommendation, offering, or affiliated provider.

Start with the account structure

Ask where the exchange proceeds will be deposited, how the account is titled, whether funds from different customers are commingled, and what institution holds the money. Then ask for the written release procedure: who must approve a wire, whether the exchanger receives confirmation, and what prevents one employee from moving funds alone.

Will my proceeds be held in a segregated account or qualified escrow arrangement?
What written authorization is required before money can leave the account?
Are dual approvals or independent verification required for wires?
How are last-minute changes to wiring instructions authenticated?

Ask about financial protection and continuity

Insurance and bonding do not eliminate risk, but the answers reveal how seriously the firm treats custody and operational failure. Request the current coverage amounts and carrier information rather than relying on a badge or a general claim.

What fidelity bond, errors-and-omissions, and cyber coverage is in force?
Who steps in if my assigned exchange officer is unavailable?
How are records, deadlines, and client instructions backed up?
Has the firm experienced a material loss, regulatory action, or data incident, and how was it resolved?

Match the team to the transaction

A straightforward forward exchange and a reverse or improvement exchange do not create the same operational demands. Ask who will work on your file, how many similar transactions the team handles, and whether the firm can coordinate with your closing, tax, and legal professionals in the states involved.

Does the team regularly handle forward, reverse, improvement, partnership, or multi-property exchanges like mine?
Who answers deadline or document questions after the initial salesperson hands off the file?
What is included in the quoted fee, and what triggers additional charges?
How quickly will I receive the exchange agreement and account instructions for review?

Compare two or three firms before signing

Use the same questions with every candidate and keep the responses in writing. A clear explanation of controls, named contacts, and a readable agreement is more useful than a long credential list. Have your own tax or legal advisor review unusual provisions before the relinquished-property closing, because the QI must be in place before you receive the proceeds.

Ready for your next step?

Answer a few quick questions and we’ll point you to firms that fit your exchange. Free, no account.

Find a Qualified Intermediary

Frequently asked questions

Does the IRS license Qualified Intermediaries?: The IRS regulations define who can serve within the QI safe harbor and who is disqualified, but the IRS does not choose or recommend your provider. State requirements and private credentials vary, so verify the firm's actual controls and coverage.
Should I choose the lowest QI fee?: Not by itself. Compare the total fee, but give greater weight to fund custody, wire controls, experience, responsiveness, and the contract terms because the proceeds and exchange deadlines are at stake.
When should I hire the QI?: Before the relinquished-property closing and before you receive or control the sale proceeds. Ideally, compare firms as soon as a sale is being planned or goes under contract.

Primary sources

We use primary government sources for the rules and eligibility statements in this guide.

Keep reading

Educational information only, not tax, legal, or investment advice. 1031 rules and deadlines are strict and can change, so confirm with the IRS and your own CPA or attorney before acting. How we source content.