A 1031 exchange usually involves three different professionals. Each has a specific job. None of them does all three jobs, and you want each one in place before you list your property.
The Qualified Intermediary (QI)
What a QI does
- Enters a written exchange agreement with you.
- Takes part in the sale of your old property and the purchase of the new one.
- Holds your sale proceeds between closings so you do not actually or constructively receive them.
- Can receive your written 45-day identification.
What a QI does not do
- Give tax advice about whether an exchange is right for you.
- Find or evaluate replacement property.
- Tell you whether a property is a good investment.
Who cannot be your QI
Your agent at the time of the transaction, and anyone who acted as your employee, attorney, accountant, investment banker or broker, or real estate agent or broker in the 2 years before your sale, generally cannot serve. There are limited exceptions for routine services.
Questions to ask a QI
- How are exchange funds held, and in whose name?
- Are funds kept separate from the company's operating money?
- What protections, such as bonding or insurance, are in place?
- What are your fees, and when are they charged?
- How do you handle the 45-day identification notice?
- How many exchanges have you handled like mine?
We keep a short list of local qualified intermediarys who handle 1031 exchanges. Ask for a referral and the publisher will reply with names and contact details.
Email for a qualified intermediary referral
Or email matt@cll-cre.com. Referrals are free to you.
The CPA or Tax Attorney
What a CPA or tax attorney does
- Estimates your gain, including the effect of depreciation.
- Compares the cost of selling outright with the benefit of deferring.
- Flags issues like boot, related-party rules, and filing deadlines.
- Prepares or reviews Form 8824 and, if needed, FTB Form 3840.
- Connects the exchange to your broader tax and estate plan.
What a CPA or tax attorney does not do
- Hold your exchange funds.
- Find or negotiate replacement property.
Questions to ask a CPA or tax attorney
- How many 1031 exchanges have you advised on or reported?
- Can you estimate my gain and tax both ways, with and without an exchange?
- How would my return due date affect my 180-day window?
- If I buy outside California, how will the annual Form 3840 filing work?
- How does this affect my estate plan?
We keep a short list of local CPA or tax attorneys who handle 1031 exchanges. Ask for a referral and the publisher will reply with names and contact details.
Email for a CPA or tax attorney referral
Or email matt@cll-cre.com. Referrals are free to you.
The Commercial Real Estate Advisor
What a commercial real estate advisor does
- Helps you price and market the property you are selling.
- Finds and evaluates replacement property within your deadlines.
- Reviews tenant, lease, and market details on commercial property.
- Negotiates purchase terms and coordinates with your QI and CPA.
What a commercial real estate advisor does not do
- Give tax or legal advice.
- Hold your exchange funds.
- Serve as your QI. A real estate agent or broker who worked for you in the 2 years before the sale is generally a disqualified person.
Questions to ask a commercial real estate advisor
- What property types and markets do you work in?
- How will you help me find replacement options before my 45-day deadline?
- How do you evaluate tenant credit and lease terms?
- Can you explain what a specific lease makes me responsible for?
- How do you work with my QI and CPA?
- What is your license and brokerage affiliation?
Commercial Advisor, eXp Commercial | CA DRE #02139034
Serves Sacramento, Roseville, Folsom, El Dorado Hills, Placerville and El Dorado County, with 1031 replacement searches nationwide.
(916) 513-0217 | matt@cll-cre.com | commerciallandluxury.com
Matt Bingaman publishes this site.
How the Three Work Together
- Before you list: talk with your CPA about the numbers and your QI about timing.
- At your sale: your QI holds the funds.
- During the 45 days: your advisor helps you find options, and your identification goes in writing to your QI.
- By day 180: you close on the new property.
- At tax time: your CPA reports the exchange.
Common questions
Who do I need for a 1031 exchange?
Most owners use three professionals: a qualified intermediary to hold the funds, a CPA or tax attorney for tax advice and reporting, and a commercial real estate advisor to sell and buy property.
What does a qualified intermediary do?
A QI enters a written exchange agreement with you, takes part in both the sale and the purchase, and holds the proceeds so you do not receive them.
Can my CPA or attorney be my qualified intermediary?
Generally not if they acted as your accountant or attorney within the 2 years before your sale, with limited exceptions for routine services.
When should I contact these professionals?
Before you list. The 45-day and 180-day deadlines start when you transfer your property.
What should I ask a qualified intermediary?
Ask how funds are held and kept separate, what protections are in place, what the fees are, and how they handle your written 45-day identification.
Sources
- 26 U.S. Code § 1031, Exchange of real property held for productive use or investment.
- 26 CFR § 1.1031(k)-1, Treatment of deferred exchanges.
- IRS Publication 527, Residential Rental Property.
- IRS, About Form 8824, Like-Kind Exchanges.
- California Franchise Tax Board, 2025 Form FTB 3840 Instructions, California Like-Kind Exchanges.
Last reviewed October 2026.