The short answer
A disqualified person is someone who cannot act as your qualified intermediary, qualified escrow holder, qualified trustee or exchange accommodation titleholder, as defined in Reg. section 1.1031(k)-1(k). The category covers anyone who was your employee, attorney, accountant, investment banker or broker, or real estate agent or broker in the two years before the first relinquished property transfers, plus persons related to you or to such an agent under a 10% ownership test. Using one forfeits the safe harbor that keeps you out of constructive receipt.
At a glance
| Agent lookback | Two years ending on the first relinquished property's transfer |
|---|---|
| Related-party test | Sections 267(b) and 707(b) with 10% in place of 50% |
| Excepted services | Prior exchange work, and routine bank, title, escrow or trust services |
| What it bars | Serving as QI, escrow holder, trustee or titleholder, or receiving the identification |
The regulation names three groups, and two kinds of past work do not count
Under Reg. section 1.1031(k)-1(k)(2), your agent at the time of the transaction is disqualified, and anyone who acted as your employee, attorney, accountant, investment banker or broker, or real estate agent or broker within the two years ending on the transfer of the first relinquished property is treated as your agent.
Paragraph (k)(3) adds anyone related to you under section 267(b) or 707(b), read with 10% in place of 50%. Paragraph (k)(4) adds anyone related in the same way to one of your agents, with a narrow exception after January 17, 2001 for certain banks and bank affiliates.
Two kinds of service are ignored for the agent test: services on exchanges intended to qualify under section 1031, and routine financial, title insurance, escrow or trust services by a financial institution, title insurer or escrow company.
Worked example: your accountant cannot hold the money, but a widely owned intermediary can
The regulation's Example 1: an accountant who prepared non-exchange work for the taxpayer within the two-year window is disqualified. If the only work in that window had been on section 1031 exchanges, the accountant would not be.
Example 3: an intermediary company is owned 10% each by ten law firms, and the managing partner of one firm, who gave the taxpayer non-exchange legal advice in the window, is the company's president. The partner and the firm are disqualified, but the company is not, because neither owns more than 10% of it. The partner's role in managing the company does not change that result.
Hypothetical: your CPA prepared your 2025 return and your sale closes in 2026. That CPA cannot be your intermediary; see attorneys, CPAs and agents as intermediaries.
Where it bites: who holds the funds and who receives the 45-day notice
A qualified intermediary, the holder of a qualified escrow account and the trustee of a qualified trust must not be you or a disqualified person under Reg. section 1.1031(k)-1(g). Fail that and the funds are treated as held by your agent, which is constructive receipt.
Your identification must go to the person obligated to transfer the replacement property, even if disqualified, or to another person involved in the exchange who is not disqualified. Sending it only to your own broker or attorney does not count.
Rev. Proc. 2000-37 bars a disqualified person from being an exchange accommodation titleholder. The separate related-party rule in section 1031(f) is covered in who is a related party.
Related questions
Can my real estate agent be my qualified intermediary?
Not if the agent acted as your real estate agent or broker within the two years before your first relinquished property transferred, unless that work was only on section 1031 exchanges.
Can my title or escrow company hold the funds?
Routine title insurance and escrow services do not make a company your agent, so it can serve if it is not otherwise disqualified and the agreement carries the required limits on your access to the cash.
Is a family member a disqualified person?
Usually. Related persons under section 267(b) are disqualified, and the Form 8824 instructions list a spouse, child, grandchild, parent, grandparent, brother or sister as related parties.
Sources
Checked against these publications on September 30, 2026. Rules and figures change; confirm the current version with your CPA or attorney before you act. This page is general information, not tax or legal advice.