A 1031 exchange takes seven specialists - advisor, qualified intermediary, CPA, real estate attorney, broker, lender, and title/escrow company - each entering at a different phase from pre-sale through post-close. The advisor or CPA usually quarterbacks the group. The relationships and the document requests are best set up before the deal starts, not once the 45-day clock is running.
The Seven Roles and When Each Matters
A 1031 exchange runs on a clock: 45 days to identify a replacement property, 180 days to close on it. Miss either deadline and the exchange is over, with no exceptions.
Hitting those dates takes seven specialists. Each enters at a different point, owns a different piece of the deal, and can sink it by arriving late or not at all.
Role | Enters | Exits | Owns | What Breaks If Missing |
|---|---|---|---|---|
Financial Advisor | Pre-sale (Day -30) | Post-close (ongoing) | Strategy, team coordination, client communication, portfolio fit | No one asks whether the exchange makes financial sense; client defaults into a 1031 without evaluating alternatives |
Qualified Intermediary (QI) | Day -20 (must be engaged before closing) | Day 180+ (final accounting) | Exchange agreement, fund custody, 45/180-day tracking, proceeds wiring | Proceeds go to client (constructive receipt); exchange fails before it starts |
CPA | Pre-sale (tax projection) | Post-close (Form 8824 filing) | Tax feasibility, depreciation recapture analysis, entity structure advice, Form 8824 | Basis miscalculated; recapture unplanned; Form 8824 not filed |
Real Estate Attorney | Day 1-45 (contract review) | Closing | Entity structure, contract review, state-law compliance, title issues | Entity mismatch (same-taxpayer failure); contract terms conflict with exchange |
Real Estate Agent/Broker | Pre-sale (listing) | Day 180 (closing on replacement) | Property listing, market research, identification candidates, purchase negotiation | No viable candidates by Day 45; negotiation delays past Day 180 |
Lender | Pre-sale (pre-approval) | Closing | Replacement property financing, loan commitment, funding within 180 days | Financing not approved in time; exchange fails at Day 180 |
Title Company / Escrow | At closing (sale and purchase) | Closing | Closing logistics, QI proceeds routing, title insurance | Proceeds wired to client instead of QI; title defect delays closing |
Phase-by-Phase Engagement
Phase 1: Pre-Sale (Months 1-3 Before Closing)
Active: Advisor, CPA, Real Estate Agent, Lender (optional)
Activity | Owner | Deliverable |
|---|---|---|
Confirm 1031 feasibility | Advisor + CPA | Tax projection (exchange vs. taxable sale) |
List property | Agent | Listing agreement, marketing plan |
Pre-approve replacement financing | Lender | Pre-approval letter |
Engage QI | Advisor + Client | Executed exchange agreement |
Milestone: Property listed. Client committed to exchange strategy. QI engaged.
Phase 2: Days 1-45 (Identification Period)
Active: QI, Advisor, CPA, Real Estate Agent
Activity | Owner | Deliverable |
|---|---|---|
Receive and confirm proceeds | QI | Written confirmation of receipt |
Source replacement candidates | Agent | 5-10 property profiles |
Screen candidates for qualification | Advisor + CPA | Vetted shortlist |
Draft and submit identification letter | Advisor + Client | Signed identification, QI confirmation |
Milestone: Identification letter delivered to QI by Day 45.
Critical failure point: If the client has not identified replacement property by Day 45, the exchange is over. No exceptions.
Phase 3: Days 46-180 (Acquisition Period)
Active: QI, Advisor, CPA, Real Estate Agent, Attorney, Lender, Title Company
Activity | Owner | Deliverable |
|---|---|---|
Negotiate purchase contract | Agent + Client | Executed purchase agreement |
Review contract for 1031 compliance | Attorney | Legal review memo |
Underwrite and approve loan | Lender | Loan commitment letter |
Monitor timeline and coordinate closing | QI + Advisor | Closing scheduled before Day 180 |
Close replacement property | Title Company | Recorded deed, title insurance |
Milestone: Replacement property closes by Day 180.
Critical failure point: Lender delays or title issues push closing past Day 180. Build a 10-day buffer.
Phase 4: Post-Close (Day 181+)
Active: CPA, Title Company (final docs), QI (final accounting)
Activity | Owner | Deliverable |
|---|---|---|
Issue final accounting and Form 1099-S | QI | Accounting statement |
File Form 8824 | CPA | Filed tax form |
Review outcome and portfolio impact | Advisor | Updated financial plan |
Handoff Failure Points
Handoff | From | To | Failure Mode | Prevention |
|---|---|---|---|---|
Sale proceeds to QI | Title Company | QI | Proceeds wired to client or wrong account | Confirm QI wiring instructions with title company in writing before closing |
Identification to QI | Client/Advisor | QI | Late, vague, or delivered to wrong party | Submit by Day 40; confirm QI receipt in writing |
QI to replacement closing | QI | Title Company | QI wiring instructions missing or incorrect at closing | Provide QI instructions to replacement title company 5+ business days before closing |
Closing docs to CPA | Advisor | CPA | CPA receives incomplete package; Form 8824 errors | Use a document checklist; send complete packet within 30 days of closing |
Quarterback Assignment
Every exchange needs one designated coordinator, and the assignment should be made in writing before the deal starts.
Condition | Quarterback |
|---|---|
Client has strong advisor relationship; exchange is straightforward | Advisor |
Exchange has complex tax implications; CPA is highly engaged | CPA |
Both are available and experienced | Advisor (financial strategy) + CPA (tax strategy), with clear division of responsibilities |
Neither takes ownership | Exchange is at risk. Assign a quarterback immediately. |
The failure mode to avoid is the one in the last row: no one takes ownership. Decisions stall, the timeline slips, and the client is left managing a roomful of specialists alone.
Building Your Referral Network
The time to build these relationships is before a deal arrives, not during the 45-day scramble.
QI Selection
- Check the National Association of Qualified Intermediaries directory (naqii.org)
- Interview at least two; ask about exchange volume, E&O insurance, fee schedule, communication practices, and references
- Confirm they coordinate with advisors and CPAs
- Maintain the relationship between deals
CPA with 1031 Experience
- Ask: How many Form 8824s have you prepared? Have you handled reverse or multi-owner exchanges?
- Confirm responsiveness and turnaround time on tax projections
Real Estate Attorney
- Ask: Do you have 1031 experience? What entity structures have you dealt with? How quickly can you review contracts?
- Not every exchange needs an attorney, but knowing one is essential for complex situations
Documents to Request from Each Party
Party | Documents |
|---|---|
QI | Engagement letter, fee schedule, E&O insurance certificate, exchange process overview, identification form |
CPA | Tax projection (two scenarios), entity structure analysis, like-kind confirmation |
Attorney | Contract review, entity structuring memo (if applicable), closing summary |
Agent | Market analysis, candidate property list, purchase contract, closing statement |
Lender | Pre-approval letter, loan commitment, proof of funds at closing |
Title Company | Settlement statements (sale and purchase), proof proceeds sent to QI, title insurance |
The Advisor's Job Is Coordination
The advisor isn't expected to be the tax expert, the title expert, and the lending expert all at once. The job is to recognize when each kind of expertise is needed, to have those relationships in place before the deal arrives, and to keep the specialists moving in the same direction so the client experiences one process instead of seven. That coordination is the part of the deal the advisor is best placed to own.
A 1031 exchange takes a coordinated team, and the advisor is usually the one who has to run it. Building the specialist relationships before a deal arrives, rather than scrambling once the 45-day clock starts, is what keeps the exchange on track and the client from having to manage it alone.
Frequently asked questions
Who should quarterback the 1031 exchange process?
Either the advisor or the CPA, depending on the relationship. If the client's CPA is actively involved and tax-savvy, the CPA often leads, since they own the tax implications. If the CPA is hands-off or less familiar with 1031s, the advisor takes the role. Agree on who's leading before the client starts the process. Whoever quarterbacks needs to be accessible, organized, and willing to coordinate several specialists at once. The worst case is both assuming the other is handling it.
When should each team member be engaged?
Pre-sale (now): advisor and CPA confirm the exchange is feasible; the agent lists the property; the lender discusses financing for the replacement. At closing: the QI takes custody of the proceeds and title/escrow processes the transaction. Days 1-45: the QI watches the identification clock, advisor and CPA identify the replacement property, the broker sources options, and the lender pre-qualifies financing. Days 46-180: the broker negotiates the purchase, the lender funds the replacement property, and the attorney handles entity structuring. Post-close: the CPA files Form 8824 and title/escrow closes out the replacement transaction.
What are the most common handoff failures?
(1) No clear quarterback, so decisions stall. (2) The client isn't told about the 45/180-day rule and assumes there's more time than there is. (3) The QI isn't engaged until after closing, causing delays and stress. (4) The identified replacement property doesn't meet the IRS like-kind requirement, forcing a restart. (5) Financing isn't pre-approved, so the purchase can't close in time. (6) The attorney isn't consulted on entity structure, creating compliance problems later. (7) The CPA comes in only at the end, after the chance to optimize the tax outcome has passed. Prevent these by assigning clear roles upfront and working from a coordination checklist.
How do you find a QI or CPA with 1031 experience?
For QIs: ask a local real estate attorney or broker for referrals, and check the National Association of Qualified Intermediaries directory. Vet them by asking about their process, their E&O insurance (critical), how many exchanges they've handled, and client references. For CPAs: ask your current CPA whether they have 1031 experience; if not, get a referral from your QI or attorney. Vet them by asking how many Form 8824s they've prepared, whether they've handled complex exchanges, and how they coordinate with QIs and attorneys. Both should be responsive and organized.
Should the advisor attend the closing?
It depends on who's quarterbacking. If that's you, being at the closing gives you a seat for any last-minute issues. If the CPA is quarterbacking, the CPA's presence may be enough. Complex exchanges, reverse 1031s especially, are a case for having both the advisor and CPA there, while straightforward ones may not need the advisor at all. Either way, get a closing summary from the title company so you know what happened and can brief the client afterward.