Escrow & Title

A Mississippi property sale involves a 1031 tax-deferred exchange. The Qualified Intermediary (QI) holds:

AThe deed to the replacement property
BThe sale proceeds on behalf of the exchanger to facilitate the tax-deferred exchange✓ Correct
CMREC's approval for the exchange
DThe title insurance commitment

Explanation

In a 1031 exchange, a Qualified Intermediary holds the sale proceeds between the sale of the relinquished property and the acquisition of the replacement property. The taxpayer must not 'constructively receive' the funds to qualify for tax deferral.

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