Forward, Reverse and Improvement 1031 Exchange Structures
Forward or Delayed 1031 Exchange
Most of your 1031 exchange transactions will be structured as forward or delayed 1031 exchange transactions where you sell your relinquished property first and then subsequently acquire and close on your replacement property within the prescribed 1031 exchange deadlines. You can learn more about 1031 exchanges by reading our article entitled "Introduction to 1031 Exchanges."
Simultaneous or Concurrent 1031 Exchange
In some instances, you can close your sale and purchase transactions simultaneously or concurrently. The simultaneous or concurrent 1031 exchange transaction is the most basic of 1031 exchange structures. A simultaneous or concurrent 1031 exchange occurs when one or more relinquished properties are swapped or exchanged simultaneously for one or more replacement properties. The relinquished property(ies) and the replacement property(ies) transactions all close on the same day in a concurrent or simultaneous 1031 exchange.
Zero Equity 1031 Exchange™
You may have a scenario where there is no cash ("zero equity") left or available in your investment property. The property's market value may have fallen below the amount of your outstanding debt on your property, which in turn eliminates any available equity that you once had. This scenario is very common during economic recessions or other downturns in the real estate industry.
However, you may still have depreciation recapture or capital gain taxes to worry about. You can set-up and complete a 1031 exchange even on property with no equity. This allows you to defer the payment of your depreciation recapture and capital gain taxes into replacement property even though you have no equity. We coined the phrase a Zero Equity 1031 Exchange™. You can learn more by reading our article entitled "Saved By A Zero Equity 1031 Exchange."
Reverse 1031 Exchange
You may find yourself in a situation where you either want to acquire, or must acquire, your replacement property before you can sell your relinquished property in a 1031 Exchange transaction. You can accomplish this by structuring a Reverse Exchange. Reverse Exchange transactions are structured pursuant to Revenue Procedure 2000-37.
Exeter Reverse 1031 Exchange Services, LLC administers both safe-harbor and non-safe-harbor Reverse 1031 Exchange strategies using both the Exchange First (relinquished property parking) and Exchange Last (replacement property parking) Reverse Exchange structures.
You can learn more about Reverse 1031 Exchange strategies by reading our articles entitled "Overview of the Reverse 1031 Exchange" and "Introduction to Reverse 1031 Exchanges Pursuant to IRS Revenue Procedure 2000-37." (See special requirements and procedures for opening a Reverse 1031 Exchange).
Improvement 1031 Exchange
You can use your 1031 Exchange funds to acquire a replacement property and then build, construct or improve the replacement property through an Improvement 1031 Exchange (also known as a Construction 1031 Exchange or Build-To-Suit 1031 Exchange). Your like-kind replacement property is acquired and held or "parked" by an Exchange Accommodation Titleholder ("EAT") while the build-outs or improvements are made to the property within the required 1031 Exchange deadlines.
You can learn more about Improvement 1031 Exchange strategies by reading our short article entitled "Overview of Improvement or Construction 1031 Exchanges". (See special requirements and procedures for opening an Improvement, Build-To-Suit or Construction 1031 Exchange).
Personal Property 1031 Exchange
Most 1031 exchange transactions involve exchanges of real property. You can also 1031 Exchange personal property for other like-kind personal property that is held and used for investment or used in your business operation. You can learn more about 1031 Exchanges of personal property by reading our articles entitled "Introduction to Personal Property 1031 Exchanges" and "1031 Exchange LKE Program Exchange Strategies" and "Introduction to 1031 Exchanges of Aircraft and Aviation Equipment."
Master 1031 Exchange (LKE) Program
1031 Exchanges of multiple depreciable property assets such as aircraft, cranes, fleets of automobiles, trucks or other vehicles, equipment, etc., can be 1031 Exchanged using the Master 1031 Exchange (LKE) Program.
Foreign Property 1031 Exchanges
You can 1031 Exchange domestic (U.S.) property for other domestic (U.S.) property or you can 1031 Exchange non-domestic (foreign) property for other non-domestic (foreign) property that are held and used as rental or investment properties or used in your trade or business operation. 1031 Exchanges of domestic for non-domestic property do not qualify for 1031 Exchange treatment.
International 1031 Exchanges involve complex issues above and beyond the normal 1031 Exchange transactions due to significant differences in the international laws, regulations, business and cultural practices, and foreign languages. Fluctuations in the foreign currency exchange rates can pose a significant risk to any international transaction as well.
Exeter 1031 Exchange Services, LLC has significant experience with foreign property 1031 Exchange transactions, including the handling of foreign currency transfers. Exeter 1031 Exchange Services, LLC has administered foreign property 1031 Exchanges in the following countries: Australia, Canada, Costa Rica, Germany, Greece, India, Israel, Mexico, New South Wales, New Zealand, Panama Canal, Poland, South Africa, Turkey and the United Kingdom (U.K.) or England.
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