Selecting a Qualified Intermediary
IRS regulations prohibit the taxpayer from receiving proceeds or taking the constructive receipt of funds in
any way, without disqualifying the exchange. Furthermore, anyone related to the taxpayer or who has
had a financial relationship with the taxpayer within the 2 years prior to the close of escrow cannot be used
as a Qualified Intermediary (QI). A QI (also known as an Exchange Accommodator) acts as an independent 3rd party who facilitates tax-deferred exchanges pursuant to Section 1031 of the Internal Revenue Code. The proactive communication of these types of restrictions and experience in exchange transactions is what sets a good QI, like TG Exchange, apart from the competition.
TG Exchange, Inc. is fully bonded and has separate corporations to handle different transactions. We specialize in 1031, Build-to-suit and Reverse Starker transactions and is a wholly owned subsidiary of Title Guaranty Escrow Services, Inc, Hawaii’s largest escrow company. Led by a well-trained and experienced staff, TG Exchange is Hawaii’s premier exchange subsidiary.
Choosing the Right QI
● The QI should be a corporation that is in the full-time business of facilitating 1031 exchanges.
● The QI should be bonded and insured against errors and omissions.
● Under written agreement with the taxpayer, the QI acquires the relinquished property and transfers it to the
● The QI holds sales proceeds, preventing the taxpayer from actual or constructive
receipt of the funds.
● The QI acquires the replacement property and transfers it to the taxpayer to complete the exchange within the necessary time constraints.