The use of a qualified intermediary is mandated in the safe harbor rules set out in Treasury Regulation 1.1031(k)-(1(g)(4). The rules stipulate that a reciprocal trade or actual exchange must take place in each transaction. This means the exchange must assign their interest in both the relinquished property and the replacement property to the qualified intermediary. The qualified intermediary actually acts as a principal in the transactions which is how a reciprocal trade is created even when the replacement property is being purchased from someone other than the buyer of the relinquished property. The objective of Opportunity Zones is to give tax breaks to spur economic growth and development in lower-income areas. One of the ways the rules incentivize investors is by keeping the requirements as minimal as possible, hence the rules do not require the use of a qualified intermediary when making an investment in a QOF. The benefit of using a QOF over a 1031 exchange depends on your objectives. With a QOF, only the gain needs to be reinvested. However, the investment in the QOF would need to be held for at least five years to receive any reduction in taxes. It is also worth noting the tax deferral with a QOF is temporary and taxes on the gain will be due in 2026 when the Opportunity Zone provisions expire. With a 1031 exchange, while you will need to reinvest the net sales proceeds, you will benefit from 100% tax deferral on the sale and you may be able to defer taxes permanently. I recommend you discuss the benefits of each of these tax deferral strategies with a tax attorney and your CPA to help you determine which strategy best aligns with your goals.