Section 1031 Reverse Exchanges
A Section 1031 reverse exchange is the right choice when you need to purchase your replacement property before you've sold your existing one. Rather than losing out on the right property because of timing, a reverse exchange lets you move first and sell later.
Why a Reverse Exchange Makes Sense
- You've found the right replacement property but haven't sold your current one yet
- You don't want to lose a time-sensitive purchase opportunity
- The IRS requires a neutral third party to temporarily hold title during the process
How the Reverse Exchange Process Works
To initiate a reverse exchange, an Exchange Accommodation Titleholder must be appointed to temporarily take title to the replacement property while you sell your existing one. Required documentation includes:
- Qualified Exchange Accommodation Agreement, outlining the parties' rights and obligations
- Assignment of Rights and Notification for the replacement property
- Reverse Exchange Waiver and Release, outlining deadlines and client obligations
- Identification of Relinquished Property, identifying the property to be sold
From there, you have 45 days to identify the property you'll sell to complete the exchange, and the entire transaction must be wrapped up within 180 days of closing on the replacement property.
Ready to Start Your Reverse Exchange?
Reverse exchanges require careful planning and precise execution. Contact our team today and we'll walk you through every step.
