Who has to receive my identification notice: the QI, the seller or my attorney?

The regulation gives two kinds of acceptable recipient, and your intermediary is both

Reg. section 1.1031(k)-1(c)(2) requires the signed notice to be sent to either "the person obligated to transfer the replacement property to the taxpayer (regardless of whether that person is a disqualified person)" or "any other person involved in the exchange other than the taxpayer or a disqualified person." It then lists examples: "any of the parties to the exchange, an intermediary, an escrow agent, and a title company."

In an intermediated exchange your qualified intermediary is the party obligated to acquire and transfer the replacement to you, and it is also a person involved in the exchange. That is why practice sends every notice there.

The IRS fact sheet names the seller of the replacement property as an alternative, and the regulation's Example 2 accepts a notice mailed to a seller in which the taxpayer owned 20 percent of the stock, because that seller was the person obligated to transfer.

Your attorney, accountant and real estate agent are disqualified, so notice to them is notice to yourself

Under paragraph (k)(2), anyone who "has acted as the taxpayer's employee, attorney, accountant, investment banker or broker, or real estate agent or broker within the 2-year period ending on the date of the transfer of the first of the relinquished properties" is treated as your agent and is a disqualified person. The Form 8824 instructions summarize: a disqualified person is "either your agent at the time of the transaction or a person related to you."

Two carve-outs keep some advisors out of that net: services only on section 1031 exchanges, and "routine financial, title insurance, escrow, or trust services" by a financial institution, title insurance company or escrow company. A title company closing your purchase can receive a notice; your long-time lawyer cannot.

Relatives and entities you own are tested at a 10 percent threshold under sections 267(b) and 707(b). The same list decides who may serve as intermediary, covered in whether your attorney, CPA or agent can be your QI.

Worked example: one notice that failed and one that held

Hypothetical. On day 44 you email a signed list of three properties to the real estate agent who sold your rental, asking her to forward it. She forwards it to the intermediary on day 47. The notice was sent before day 45 only to a disqualified person, and it reached a proper recipient after the period ended, so nothing was identified.

Your neighbor, selling the same week, signs the list and emails it directly to his intermediary on day 44, copying his agent and his CPA. The intermediary is a proper recipient, so the copies to the agent and CPA are harmless.

Copying advisors is fine; relying on them to deliver is not.

Whoever receives the identification must also receive any revocation

Paragraph (c)(6) says a revocation is effective only if it is a signed writing sent before day 45 "to the person to whom the identification of the replacement property was sent." If you identified to the seller of one property and to your intermediary for the others, a revocation must go to the right one.

Keeping everything with one recipient avoids that tangle; the rules for rewriting a list before the deadline are in changing your identification list.

Send it to the intermediary, copy whoever needs to know, and keep proof

How you send the notice is a separate question, covered in identification by email or text.

• Address the notice to your qualified intermediary by name and exchange number, using its form if it has one.
• Copy your attorney, CPA and agents for their files, not as recipients of record.
• For a DST interest, still send to the intermediary; the description standard is in identifying a DST interest.
• If your intermediary is a lawyer or CPA firm affiliate, confirm the (k) carve-outs apply before you rely on it.
• Get a written acknowledgement before midnight on day 45 and keep it with the notice.