Q

Q
Qualified 1031 Property

Both the relinquished property and the replacement property must be held by a taxpayer for a “productive use in a trade or business or for investment”.

Qualified Escrow Agreement

This is an IRS safe harbor which may be used in connection with holding exchange funds.  Although there are various structures, usually a third party bank depository will hold the funds in escrow for the mutual benefit of the taxpayer and qualified intermediary.

Qualified Exchange Accommodation Agreement

This is a term that the IRS coined in the “reverse exchange” Rev. Proc. 2000-39 pertaining to the overarching agreement which must be put in place between the Exchange Accommodation Titleholder and the taxpayer.  The Rev. Proc. contains certain provisions which are mandatory to be in the agreement in order for these parking arrangements to be in the safe harbor set forth in the Rev. Proc.  This applies to reverse exchanges of relinquished or replacement property as well as build-to-suit and property improvement exchanges.

Qualified Intermediary

(“QI”) A person acting to facilitate an exchange under section 1031 and the regulations. This person may not be the taxpayer or a disqualified person. Section 1.1031(k)-1(g)(4)(iii) requires that, for an intermediary to be a qualified intermediary, the intermediary must enter into a written "exchange" agreement with the taxpayer and, as required by the exchange agreement, acquire the relinquished property from the taxpayer, transfer the relinquished property, acquire the replacement property, and transfer the replacement property to the taxpayer.

Qualified Trust Agreement

This is an IRS safe harbor which may be used in connection with holding exchange funds.  Although there are various structures, usually a third party institution which has trust powers will hold the funds in trust for the mutual benefit of the taxpayer and qualified intermediary.

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