Reverse exchanges, construction exchanges and leasehold exchanges require a complex exchange structure where you will not own the replacement property until the exchange ends. Instead, the replacement property will be “parked” with a single-member LLC which is a disregarded entity where our holding company is the sole member. Such an entity is called an exchange accommodation titleholder (“EAT”). The taxpayer will acquire the replacement property at the end of the exchange when we assign the sole membership interest in the EAT to him/her, satisfying the same taxpayer requirement for exchanges described above. The same taxpayer requirement means that the taxpayer selling the relinquished property must be the same taxpayer purchasing the replacement property. The exchange does not work if the seller of the relinquished property and purchaser of the replacement property are different taxpayers.
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.