The use of a Qualified Intermediary is essential to completing a successful IRC §1031 Tax Deferred Exchange. The Taxpayer enters into an Exchange Agreement with the Qualified. Intermediary.You must report the exchange to the IRS on Form 8824. With your final statement, we will send our workbook explaining how to fill out your Form 8824 properly. They must then select a qualified intermediary (QI), who will hold the proceeds from the sale of the relinquished property and facilitate the exchange process. The Qualified Intermediary is the glue that puts the buyer and seller of property together into the form of a 1031 Exchange. Intermediary agrees to act as a qualified intermediary within the meaning of Treasury Regulations. Section 1.1031(k)-1(g)(4). To meet the requirements of the Qualified Intermediary (QI) safe harbor, there must be a written exchange agreement between the Taxpayer and the QI.