While not a prerequisite, amending your contract or sales contract is good practice to reflect your § 1031 exchange transaction. This language is usually referred to as the "exchange cooperation clause". Any person related to the taxable person or having had a financial relationship with the taxable person during the two years preceding the closing of the filing of the Exchange (with the exception of the provision of routine financial services) may not serve as an IQ (including staff), unless those services were "services to the taxable person in connection with the exchange of goods, intended to qualify for the non-recognition of the gains or losses referred to in section 1031".  This means that the taxpayer can only use his lawyer, accountant, investment banker, broker or real estate agent in exceptional cases. An IQ should be pasted and insured against errors and omissions. The relevant educational context, such as taxation, law or finance, is desirable. Nevada is the only state where an IQ must be allowed. Foreign financial institutions and foreign branches of U.S. financial institutions may enter into an agreement with the IRS to be a qualified intermediary.
An IQ is entitled to certain simplified rules of withholding and reporting. Generally speaking, there are three main areas in which intermediaries with IQ status benefit from such simplified treatment. IRC §1441 et seq. regulates the withholding of income taxes on payments made by the United States to a non-U.S. country. No one.  As a general rule, the US payer must verify the tax identification number (TIN) of its beneficiaries and withhold 30% of this payment in the absence of a TIN.  A §1441 Qualified Intermediary (QI) is typically a foreign bank or other foreign financial institution that signs an agreement with the Internal Revenue Service (IRS).  As part of the agreement, the IQ maintains its own U.S.
records. or the foreign status of the beneficial owner of the payments and may assume responsibility for the tax return and withholding tax.  The QI agreement is valid for 6 years and the QI company is regularly subject to an IRS or external audit to confirm compliance with the contractual conditions.  The Section 1441 IQ regime was then supplemented by reporting requirements for foreign accounts under the Foreign Account Tax Compliance Act. There are no licensing requirements for intermediaries. You do not have to be a whole person within the meaning of the internal income code to be qualified. The Code prohibits certain "agents" of the taxable person from being qualified. Accountants, lawyers and brokers who have served taxable persons in their professional duties in the last two years shall be disqualified from the activity of qualified intermediary for a taxable person in an exchange. . .