Qualified Intermediaries, Explained

Confirm the Louisiana asset before planning the exchange

An exchange starts with the interest that may be sold. The parish abstract identifies the mineral servitude or royalty interest, prescription history, current owner, legal description, producing status, lease, unit, paid decimal, and proposed deed scope. Tax planning cannot correct an undefined conveyance. The relinquished asset, expected proceeds, debt treatment, sale date, and closing terms should be visible before replacement-property deadlines are calculated.

Place the 45-day and 180-day dates on the closing file

The exchange calendar is measured from the relinquished-property closing. The working file records the identification deadline, acquisition deadline, qualified intermediary engagement, written identification method, backup choices, lender conditions, title work, and expected replacement closing. Louisiana mineral title, succession curative work, or prescription questions should be resolved early enough that a delayed deed does not collide with the federal exchange calendar.

Keep the qualified intermediary independent

A qualified intermediary should be engaged before the relinquished sale closes and should receive proceeds directly under the exchange documents. The exchange file should distinguish the intermediary's role from the roles of the CPA, attorney, title reviewer, broker, lender, and mineral buyer. Funds, assignments, notices, identification letters, settlement statements, and deeds should follow the same written exchange plan rather than moving through the owner's account.

Document replacement-property fit

Replacement property should be evaluated as a separately defined asset. For mineral interests, the file should identify the jurisdiction, record owner, legal description, mineral estate, producing status, lease, unit, title requirements, income evidence, operator concentration, development assumptions, and closing certainty. For real property, the same discipline applies to title, debt replacement, income, inspections, management, and closing conditions. Backup options remain active until the exchange can close.

Reconcile the exchange at closing

Before the exchange closes, compare the accepted purchase agreement, intermediary documents, identification record, mineral deed or replacement-property deed, legal exhibit, settlement statement, title requirements, tax forms, and payment instructions. Confirm the parties, property description, fraction or fee interest, effective date, included proceeds, reserved rights, debt, boot, and expected net amount. Legal and tax advisers should review the final structure because general educational material cannot determine qualification for a specific transaction.