REVERSE
EXCHANGE
A reverse
exchange is sometimes required where properties are unique or
when the local real estate market is hot. We attempt to avoid
this type of exchange whenever possible since it is more
complicated and expensive. In the reverse exchange, your
replacement property is acquired prior to the sale of your
existing property. There are two types of reverse exchanges
depending on whether the replacement or relinquished property
is “parked” by the qualified intermediary. Both of these
transactions can be accomplished under specific regulations, but
in this case you would have 45 days to identify the property to
be sold and 180 days to sell it. (Both periods start from the
date of the initial transaction.) We will form a single member
limited liability company to hold the parked property and will
convey this company to you at the end of the exchange.
If you
need more than 180 days to complete the transaction, this may be
possible with a “non-safe harbor” exchange. This exchange will
require assistance from legal and tax specialists and brings
both additional cost and risk to the exchange.
If
you need help with a reverse exchange, please call us at
956-546-1031, or email
Tom Sarytchoff. After discussing the transaction with you we’ll
forward our engagement letter and exchange contract.
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