1031.Exchange INTELLIGENCE NETWORK
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EXCHANGE STRUCTURE

Reverse 1031 Exchange

When the replacement property needs to be secured before the relinquished property is sold.

Sometimes the replacement opportunity appears first.

A reverse exchange is used when replacement property must be acquired before the taxpayer has disposed of the relinquished property. Because the taxpayer generally cannot simply own both properties and retroactively declare an exchange, specialized parking arrangements are commonly used under professional guidance.

Revenue Procedure 2000-37 describes a safe harbor involving a qualified exchange accommodation arrangement. Reverse exchanges can create additional financing, title, entity, carrying-cost and documentation complexity.

Planning priority

Bring the QI/EAT team, lender, attorney and tax advisor into the transaction before the replacement acquisition is committed to a closing structure.

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RELATED INTELLIGENCE

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SECURITIZED REAL ESTATE

Delaware Statutory Trusts & 1031 Exchanges

Where DST interests may enter a replacement-property strategy—and why tax analysis and securities regulation both matter.

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Delayed 1031 Exchange

The most familiar deferred exchange structure: relinquished property first, replacement property later, with strict timing and funds-control rules.

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Improvement / Build-to-Suit 1031 Exchange

How construction or improvements can become part of a more complex exchange strategy when timing and ownership are coordinated correctly.

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Partial 1031 Exchange

An exchange does not always have to defer every dollar of gain—but partial deferral should be modeled deliberately.

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