A simultaneous exchange, also known as a simultaneous swap or concurrent exchange, is a type of 1031 exchange where the relinquished property and the replacement property are exchanged simultaneously or on the same day.
In this exchange, the properties are typically swapped directly between the parties involved, facilitated by a qualified intermediary like Peak 1031 Exchange, to meet the requirements of Section 1031 of the Internal Revenue Code for tax-deferred treatment.
A delayed exchange, also known as a deferred or forward exchange, is a type of 1031 exchange where the sale of the relinquished property and the purchase of the replacement property are not completed simultaneously.
Instead, the taxpayer sells the relinquished property first and then has a specific timeframe, usually 45 days to identify and 180 days to acquire the replacement property.
A reverse exchange, is a type of 1031 exchange where the replacement property is acquired before the relinquished property is sold.
In this exchange, the taxpayer purchases the replacement property first through a qualified intermediary like Peak 1031 Exchange, who holds the property until the relinquished property is sold. Once the relinquished property is sold, the reverse exchange is completed by transferring ownership of the replacement property to the taxpayer.
Reverse exchanges require careful planning and compliance with strict IRS regulations to qualify for tax-deferred treatment under Section 1031 of the Internal Revenue Code.
An Improvement Exchange, also known as a Construction Exchange or Build-to-Suit Exchange, is a type of 1031 exchange where a taxpayer uses exchange proceeds to make improvements or additions to the replacement property during the exchange period. This allows the taxpayer to acquire a replacement property that may not be fully developed or constructed at the time of acquisition.
The improvements to the replacement property must be completed within the exchange timeline specified by the IRS, typically within 180 days, to qualify for tax-deferred treatment under Section 1031 of the Internal Revenue Code.
Like other 1031 exchanges, an Improvement Exchange must be carefully structured and executed in compliance with IRS regulations and guidelines.
