The 4 Main Structures of a 1031 Exchange: How They Benefit Investors the Most

1031 Exchange Structures From Simple to Complex

We are pleased to introduce Bill Exeter, CEO of Exeter 1031 Exchange Services, LLC as one of our nationwide investment expert partners. As a leading national provider of comprehensive 1031 Exchange services, Bill Exeter has contributed the following article from his 1031 Exchange Guidebook on our website to provide valuable insights for investors in the area of 1031 Exchanges.

Forward 1031 Exchange: Simultaneous 1031 Exchange

The simultaneous (“concurrent”) 1031 Exchange is the most basic 1031 Exchange structure. This takes place when one or more relinquished properties are swapped (exchanged) simultaneously for one or more replacement properties. The relinquished property and the replacement property transactions all close on the same day in a simultaneous 1031 Exchange transaction.

Delayed 1031 Exchange

Most Forward 1031 Exchange transactions are structured as Delayed 1031 Exchanges, where you sell your relinquished property first and then subsequently acquire your replacement property within the prescribed deadlines. 

We can help you and your legal, tax and financial advisors plan your Forward 1031 Exchange to comply with the requirements for identifying and acquiring replacement property.

Reverse 1031 Exchange

On occasion, you may need or want to acquire your replacement property before you close on the sale of your relinquished property. IRS Revenue Procedure 2000-37 allows this. This Revenue Procedure allows you to acquire your replacement property first and then sell your relinquished property later. This is accomplished by transferring or “parking” legal title to either your relinquished property or replacement property with an Exchange Accommodation Titleholder (“EAT”) to properly structure and complete a Reverse 1031 Exchange transaction. 

There are two components to a Reverse 1031 Exchange transaction: 

(1) A parking arrangement where an EAT acquires and holds or “parks” legal title to your relinquished property or your replacement property; and 

(2) a Simultaneous 1031 Exchange, either at the beginning (“Exchange First”) or at the end (“Exchange Last”) of the Reverse 1031 Exchange transaction. 

We can help you and your professional advisors structure your Reverse 1031 Exchange transaction by functioning as the EAT. We acquire and hold or “park” legal title to either your relinquished property in an Exchange First structure, or your replacement property in an Exchange Last structure, while you sell your relinquished property. 

Reverse 1031 Exchange transactions are very complicated. They require an experienced and knowledgeable Qualified Intermediary and Exchange Accommodation Titleholder to safely and successfully complete your transaction. 

Improvement (Build-To-Suit) 1031 Exchange

You can use your 1031 Exchange funds to acquire replacement property, then build, construct or improve the replacement property through an Improvement 1031 Exchange (also known as a Construction or Build-To-Suit 1031 Exchange). 

Your replacement property is acquired and held or “parked” by an Exchange Accommodation Titleholder while improvements are made to the property within the required 1031 Exchange deadlines. 

Specific 1031 Exchange requirements must be adhered to to qualify for tax-deferred exchange treatment under Section 1031 of the Internal Revenue Code and Section 1.1031 of the Department of the Treasury Regulations. 

Improvement 1031 Exchange transactions are very complex. They require an experienced and knowledgeable Qualified Intermediary and Exchange Accommodation Titleholder to safely and successfully complete your transaction.

We hope the insights provided by Bill Exeter of Exeter 1031 Exchange Services, LLC in this article have been informative and beneficial. We at CBC Capital Advisors are proud to partner with such a distinguished firm. Together, we are committed to facilitating a seamless 1031 exchange process for our clients. Our collaboration ensures that you receive comprehensive support and guidance, making your exchange experience as smooth and efficient as possible.

For the past 40+ years it has been our honor and pleasure to help clients achieve their investment goals through commercial real estate investing through…

  • Our Exclusive Nationwide Investment Network
  • Off-Market Commercial Real Estate Opportunities – Nationwide
  • and Saving Taxes with 1031 Exchanges

To Learn More, Give CBC Capital Advisors a Call at (806) 793-0888

In addition, you can learn all about our exclusive nationwide investing network and capabilities by watching Rick Canup’s short investment presentation below.