WHAT IS A “QUALIFIED INTERMEDIARY?” An Intermediary is that entity or person who:
(a) acts as the middle-man or “straw-man” in exchange transactions; (b) holds the proceeds of the sale of the relinquished property; (c) does any buying of replacement property or selling of the relinquished property necessary on behalf of the exchanger. The Intermediary typically acquires the relinquished property from the exchanger and sells it to its ultimate buyer, using the proceeds of the sales to acquire and convey to the exchanger the replacement property. Your Intermediary should be a corporation rather than an individual in order to protect against your Intermediary’s death, disability, incapacity, judgment liens, etc. Furthermore, intermediaries should offer mechanisms and procedures designed to protect your transactions, together with any funds held, through the use of letters of credit, third party guarantees, bonding and Errors and Omissions insurance. It is also extremely important for an Intermediary to employ proper custodial procedures for sale proceeds and other fund
