October, 2000: IRS allows Reverse Exchanges

This Article is designed to be of general interest. The specific techniques and information discussed may not apply to you. Before acting on any matter contained herein, you should consult with your personal legal adviser.

For information see 1031 Article

Reverse Exchange Update: In October, 2000, the IRS issued a position paper authorizing "Reverse Exchanges" whereby the new property is acquired BEFORE the old property is sold. Until now, we thought it could work, but now the IRS has given specific approval to the technique.

The difficulty with this technique is the practical problem of financing: How can you afford to buy the new property before you get the cash from the sale of the old property?

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