How to choose a Qualified Intermediary
QIs are not federally regulated, so anyone can call themselves one. The money that matters is the money they hold for you, so weigh:
- Fund security. Segregated, qualified escrow or trust accounts, not commingled operating funds. Ask how your proceeds are held.
- Bonding and insurance. A fidelity bond and errors-and-omissions coverage sized to the exchanges they handle.
- Experience and credentials. A Certified Exchange Specialist (CES) designation from the Federation of Exchange Accommodators signals tested competence.
- Fee transparency. A flat, written fee, and clarity on who earns the interest (float) on your held funds.
You can look up a firm in the Federation of Exchange Accommodators’ Find a QI Company directory.
What does a Qualified Intermediary cost?
A standard delayed exchange typically runs 600 to 1,500 dollars, with many QIs around 800 to 1,000 dollars, plus a per-property fee for additional replacement properties. Reverse and construction exchanges cost more, often 5,000 to 15,000 dollars. Much of a QI’s revenue comes from interest on the funds it holds, so the headline fee can be modest.
Estimate what you can defer first
Before you engage a QI, see how much capital gains and depreciation recapture tax an exchange would defer, and the 45 and 180-day deadlines you will need to meet.
1031 exchange calculator1031 exchanges by state
State tax treatment of a non-deferred gain varies. Pick your state for local context.
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- District of Columbia
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming