In a Reverse Exchange, the eventual replacement property is acquired before the sale of the relinquished property. Because the taxpayer cannot own both the relinquished property and the replacement property at the same time, the eventual replacement property is “parked” with an unrelated third party, referred to as an Accommodating Titleholder (“AT”) or Exchange Accommodation Titleholder (“EAT”), until the relinquished property is sold. In order to qualify for tax-deferral under the safe-harbor regulations, the parked property must be acquired by the taxpayer as replacement property within 180 days from the day the Accommodating Titleholder purchased it. The fees associated with these exchanges are higher due to the transactional complexity.
Strategic 1031 Exchange Advisors, LLC, a Georgia limited liability company, is a qualified intermediary for 1031 exchanges only. It is not an accounting firm, law firm or registered investment professional and therefore is not qualified to give accounting, tax, legal or investment advice, and, further, cannot act in an agency capacity on behalf of its clients. This website is for informational purposes only and does not and is not intended to constitute accounting, tax, legal or investment advice. We advise you to consult with your accountant, attorney and investment professional on all matters related to your exchange.