1031 Reverse Exchanges of Real Property
If you find a property you would like to acquire before you sell your current property, a Reverse 1031 Exchange can save you thousands of dollars in capital gains tax. A reverse exchange situation arises when the taxpayer needs to acquire the replacement property before disposing of the relinquished property. Often times, owners of real property face the prospect of losing the opportunity to acquire a desirable replacement property, when the seller of such property is unwilling or unable to wait while the taxpayer completes the disposition of the relinquished property.
Safe Harbor & Exchange Accommodation Titleholder
On September 15, 2000, the IRS issued a Revenue Procedure providing a "safe harbor" for a variety of property "parking" arrangements. For this type of exchange, legal title to the property must be held by a third party, referred to as an Exchange Accommodation Titleholder (EAT), for a period of time not to exceed six months. Essentiall,y the EAT acquires the property from the seller on behalf of the buyer and holds it in abeyance until the taxpayer is able to sell his or her relinquished property. At that time, the taxpayer exchanges the relinquished property for the replacement property being held by the EAT. In a reverse exchange, the taxpayer effectively is able to acquire the replacement property prior to the sale of the relinquished property.
Contact Us About Structuring Reverse Exchanges
Accruit provides all types of real estate exchanges through its wholly owned subsidiary, Accruit Exchange Accommodation Services, LLC. A national leader in complex real estate exchange transactions, Accruit specializes in reverse, build‐to‐suit and improvement exchanges as well as simple forward exchanges of real estate. We offer unparalleled qualified intermediary and exchange accommodation titleholder services including:
- a dedicated real estate team to assist you with every step of your transaction
- an attorney and Certified Exchange Specialist® to help structure your exchange
- segregated funds
- individual limited liability companies are utilized for purposes of holding title in reverse exchanges
- adherence to all mandated state regulatory QI guidelines including bonding and insurance