Can You Hold 1031 Exchange Proceeds Yourself?

How It Actually Has to Work

A Qualified Intermediary must be engaged BEFORE your sale closes. The QI holds the proceeds under an exchange agreement that restricts your access, then wires them into the replacement purchase. Funds parked in your own account satisfy no safe harbor in the regulations (26 CFR 1.1031(k)-1(f)) — there's no cleanup, no do-over.

The practical checklist is short: pick a QI before closing, get the exchange agreement signed, and route the closing proceeds directly from the title company to the QI. Your money never touches your hands, and the deferral survives.

• Engage the QI before the closing date — not the week after
• Proceeds flow: title company → QI → replacement closing
• Your access to the funds is restricted for the whole exchange period

My sale already closed and I have the money. Options?

For that property, the 1031 window is closed — constructive receipt already happened. The play now is tax planning, and lining up the next disposal properly.

Can my attorney or CPA hold the funds instead?

Someone who's been your agent within two years is disqualified from acting as your QI. Use an independent intermediary.

When exactly does the QI need to be in place?

Signed and documented before you transfer the relinquished property. Most QIs can paper an exchange in days — but before closing is a hard line.