Reverse 1031 exchanges are set up differently than forward exchanges, though the end result is ultimately the same – tax deferral. Give us a call today to get started with your Boston reverse 1031 exchange. Whether you’re exchanging real property, our qualified intermediaries have the experience and knowledge to guide you through every step of the exchange process 877.373.1031.
Reverse Like-Kind Exchange Explained
Though the end result is the same, reverse exchanges are different from forward exchanges in practice. Boiled down to the simplest terms, a reverse exchange is done backwards when compared to a forward exchange. In a forward 1031 exchange, the first thing you do is sell your relinquished property. Then you identify and close on your new replacement property over the next 180 days. By contrast, a reverse exchange begins with the purchase of the replacement property, and ends with the sale of the relinquished property. The 180 day time limit is the same, but the order or operations is reversed.
So why would a person choose to do a reverse 1031 exchange? Well, sometimes a taxpayer may find the perfect replacement property before they have put their relinquished property up for sale. If the real estate market is hot, that taxpayer will likely want to lock down that replacement property as soon as possible so they don’t lose it to another buyer. A reverse exchange can help that taxpayer close on that new property quickly, and then still benefit from the tax savings of a 1031 exchange by selling their relinquished property within the following 180 days.
Boston Reverse Exchange Services
Using a reverse 1031 exchange, you can avoid a hefty capital gains tax hit when you sell property. And you get to keep your money working for you in a continued investment. 1031 exchanges are available to all US citizens – you don’t have to be a big investor to realize the tax benefits of a 1031 exchange. Start your Boston reverse exchange today by giving our experienced qualified intermediaries a call 877.373.1031.