A reverse exchange is a process under which the investor finds the replacement property that he wants to acquire before selling the current property; in this case, Reverse Exchange can be utilized to maximize the tax deferral. If an investor likes to build on or make changes to a replacement property, in this case, he can use the exchange proceeds for structuring an Improvement Exchange. Also known as “parking” transactions, both Reverse and Improvement Exchanges are two of the more complex yet precious exchange structures accessible
Why are Reverse 1031 Exchanges More Complicated?
Exchange Accommodation Titleholder (an EAT) is required in Reverse Exchanges to hold title to either the customer’s old relinquished property or new replacement property pending the completion of the exchange.
IRS regulations inhibit the investor from using the proceeds to improve the property that the investor already owns. If the exchange funds are used for the improvement of the replacement property, as a part of 1031 Exchange by the investor, the investor can enter into development or Build-to-suit Exchange. In this case, the EAT gives a title to the new replacement property while improvements are being made so that the EAT can transfer the replacement property to the investor at the higher improved value.
What does QualifiedIntermediary. com do for your Reverse 1031 Exchange?
To have a smooth and successful parking transaction, QualifiedIntermediary.com coordinates with the Experts for the entire exchange process like the client’s tax and legal counsel, lender, title company, environmental consultant, and settlement officer. QualifiedIntermediary.com will help you to meet the best QI. This QI utilizes the best and most current exchange structures and business practices available to help you achieve your desired result. The QI of QualifiedIntermediary.com will also help you to employs separate limited liability companies (LLCs) for each exchanger for the proper segregation of property and to never comingled with other properties that the EAT has. The protection afforded by our experts for utilizing this type of entity ensures that the client’s property will be safe while QI holds title and completes the exchange.