Qualified Intermediary

A Qualified Intermediary (QI) is a financial institution or entity that helps investors execute a tax-deferred exchange of investment properties, often in real estate. When an investor sells a property and wants to buy another, a QI holds the sale proceeds to ensure the money is not received directly by the seller, which could trigger taxes. Instead, the QI facilitates the purchase of the new property within a specific timeframe, allowing the investor to defer capital gains taxes while reinvesting in real estate. This process is part of what is known as a 1031 exchange in the U.S. tax code.