CPA-led 1031 exchange guide
1031 Exchange Qualified Intermediary and CPA
A Qualified Intermediary and the investor's CPA have different jobs in a Section 1031 exchange. Coordinating those roles before closing helps surface timing, basis, entity, debt, and reporting questions without confusing exchange facilitation with return preparation.
The Qualified Intermediary role
The QI coordinates the exchange agreement, assignments, closing instructions, replacement-property identification, exchange-period deadlines, and transfer of exchange funds. The engagement should begin before the relinquished property closes.
The tax preparer's role
The investor's CPA or tax preparer evaluates the taxpayer's facts, basis, depreciation, recognized gain, replacement basis, state reporting, and federal return requirements. Form 8824 is generally filed with the return for the year of the exchange.
Where coordination matters
Questions about taxpayer identity, property use, cash distributions, debt replacement, related parties, and entity structure can affect the planned exchange. Resolving them early is easier than reconstructing the transaction after closing.
- Ownership and title consistency
- Adjusted basis and depreciation records
- Cash and debt replacement
- Identification and closing dates
- Tax-return and record-retention package
CPA guidance does not remove independent review
Brandon's guidance alongside i1031's separate Qualified Intermediary workflow can improve communication and issue spotting, but it does not guarantee eligibility or replace transaction-specific advice from the investor's own tax and legal professionals.
Frequently Asked Questions
Do I need both a Qualified Intermediary and a CPA?
A delayed exchange generally uses a Qualified Intermediary, and the investor should involve a qualified tax professional to evaluate and report the transaction.
Does the QI prepare my tax return?
The QI normally provides the exchange records; the investor's return preparer completes the tax filing and determines the reporting treatment.