Safe harbors in 1031 context are IRS-approved procedural structures that provide certainty — following them guarantees compliance. The qualified intermediary safe harbor is the standard structure for delayed exchanges.
IRS Treas. Reg. § 1.1031(k)-1(g) provides multiple safe harbors including the QI arrangement, qualified trust, and qualified escrow. The QI safe harbor is by far the most common — a qualified intermediary holds sale proceeds and orchestrates the exchange without the exchanger taking "constructive receipt."
Every standard LA multifamily 1031 uses the QI safe harbor. Structural deviations from safe-harbor compliance create audit risk. Stick to the standard structures; the cost savings from non-safe-harbor approaches rarely justify the risk.
Thinking about selling? Get a no-obligation evaluation on your building.
Request Free Evaluation →