What "qualifies" a "qualified intermediary"...

What makes a Qualified Intermediary 'Qualified'...?

Trick question: it has two answers.

1. The I.R.S. answer: technically, nothing! In the IRS regulations, a "qualified" intermediary is anyone who is not "disqualified." You are disqualified if you have acted as the employee, attorney, banker, broker, or real estate agent for an exchanger within the past two years, or if you are related to the exchanger.

An entity (like a corporation) is disqualified if any disqualified person owns more than 10% of that entity.

Other than that, ANYONE, according to the IRS, is qualified to be your intermediary. Even a convicted felon!

2. The Experts' answer: You should insist that your Qualified Intermediary actually have some qualifications! Since the IRS sets no standards, it is up to you to choose a Q.I. with expertise, integrity, and experience. Here are some criteria you can use to select a truly QUALIFIED intermediary:

Will your exchange be handled by professionals?
Is your Q.I. available to you to answer your questions throughout the exchange, no matter how complex?
Will your Q.I. defend your exchange if it is audited?
Is the Q.I. bonded? • How will the Q.I. hold your exchange funds?
Will the Q.I. give you honest and direct access to view your account balance, 24/7?

In short, anyone CAN be your QI, but not just anyone SHOULD be your QI.

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