Video: Can You Exceed 180 Days in a Reverse Exchange?

Can Exchangers go beyond the 180-day timeline in a reverse exchange? The short answer is yes, but only under specific conditions. To extend the timeline, the transaction must be structured as a "Non-Safe Harbor" Specialty Reverse Transaction. In this structure, an Exchange Accommodation Titleholder (EAT) holds the title to the property, typically the Replacement Property, within a Special-purpose Entity (SPE). Standard Reverse Exchanges, which follow IRS safe harbor rules, do not allow for this extension.

Exceptions to the 180-day limit are often discussed in the context of parking arrangements, where practical challenges like delays in injecting exchange value into property improvements can arise. While case law and tax authority support extending parking arrangements under an EAT in certain scenarios, it’s important to note that once the Relinquished Property is sold, the forward exchange timeline begins, and the strict 180-day limit to acquire Replacement Property applies.

In this educational video, understand how these exceptions work in specific Reverse 1031 Exchange strategies.