What role does the Qualified Intermediary play in a Sec. 1031 exchange transaction?
In order for a taxpayer to successfully complete a ยง1031 tax deferred exchange, it is vitally important that the taxpayer does not receive, actually or constructively, any money or other property before the taxpayer receives its like kind Replacement Property. If the taxpayer does actually or constructively receive money from the sale of Relinquished Property before it receives the like kind Replacement Property, the transaction will constitute a sale, rather than an exchange, and will not qualify for nonrecognition treatment. For purposes of evaluating whether a taxpayer is in actual or constructive receipt of money prior to its receipt of like kind Replacement Property, one must determine whether the taxpayer has the right to control or take possession of the funds at will, or whether certain limitation on its ability to control or access the funds lapse, expire or are waived. In order to ensure that the taxpayer does not receive actual or constructive receipt of the proceeds of sale
