Reverse Starker Exchange Opens Up Possibilities for Exchanges
Before 2000, 1031 Exchanges only applied to those first sold one property and then subsequently bought another in exchange. Since 2000, taxpayers have been able to buy the new property first and then identify and sell the property they already hold and still qualify for the exchange-related tax benefits.Reverse starker exchange is governed by many of the same rules that apply to the typical exchange. They must adhere to the like-kind definitions and the same time requirements. In other words, the taxpayer has 45 days from the close of the purchase to identify the relinquished property and 180 days from the close to sell that property.