Qualified intermediary

Definition

In a 1031 exchange, a person who acquires business or investment property from a taxpayer, sells that property, uses the proceeds therefrom to acquire like-kind business or investment property for the taxpayer, and then transfers the like-kind property to the taxpayer. A taxpayer who uses a qualified intermediary to conduct a 1031 exchange can defer payment of capital gains tax on the sale of his or her property.

Illustrative caselaw

See, e.g. Teruya Bros., Ltd. v. C.I.R., 580 F.3d 1038 (9th Cir. 2009).

See also