The Six Types of §1031 Tax Deferred Exchanges

1- Simultaneous:  When both relinquished and replacement properties close escrow the same day.*

2- Delayed:  After the relinquished has closed escrow, the replacement property must be identified within the first 45 days, and purchased within 180 days. *

3- Reverse:  Allows the purchase of the replacement property to close escrow before the relinquished property closes escrow.  The relinquished property must be identified within 45 days after escrow has closed on the purchase property, and the sale must close escrow no later than 180 days. *

4- Hybrid:  Combining both Delayed and Reverse Exchanges involving multiple investment properties. *

5- Build to Suit:  Allows the taxpayer to construct improvements on the replacement property during the course of the exchange. *

6- Personal Property:  An Exchange involving personal property, (e.g. airplane for an airplane, boat for a boat or a restaurant business for a restaurant business), to be used for investment or the productive use in a trade or business. *

* Each type of Exchange involves special rules and requirements promulgated from the IRS.  An experience Intermediary should be employed to facilitate such transactions to assure proper handling and tax deferral by the IRS.  Remember that all 1031 Tax-Deferred Exchanges must be set up prior to the close of escrow.  Please consult with your professional administrator at Exchange Resources, Inc. to discuss the details of your Exchange.  We are always pleased to answer any questions you might have regarding your Exchange.