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What is a reverse
exchange?
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A reverse exchange occurs when a taxpayer acquires a
Replacement Property before disposing of their Relinquished
Property. The "Exchange Accommodation Titleholder" (EAT) takes
title to ("parks") the replacement property and holds it until
the taxpayer is able to sell the relinquished property. The
taxpayer then exchanges with the EAT, who now owns the
replacement property. An exchange structured within the safe
harbor of Rev. Proc. 2000-37 cannot have a parking period that
goes beyond 180 days.
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What is a
multi-asset exchange?
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A multi-asset exchange involves
both real and personal property. For example, the sale of an
apartment may include the underlying land and buildings, as well
as the furnishings and equipment. If the taxpayer wants to
exchange the apartment, he would exchange the land and buildings
as one part of the exchange. The furnishings and equipment would
be separated into groups of like-kind or like-class property,
with the groups of relinquished property being exchanged for
groups of replacement property.
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What Forms are required during tax filing?
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After the exchange, the taxpayer is required to file form 8824
along with the Taxpayer’s federal income tax return for the year
in which the relinquished property was transferred.
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What are your fees to assist in the Exchange?
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Fees vary depending on the size, number of properties and
complexity of the exchange. Contact us to discuss your
particular needs. You deserve personal attention from the start
including answers to all your questions including fees.
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