Will The Real 1031 Exchange Please Stand Up

I have seen so many different ways of referring to 1031 exchange transactions over the years that my head spins, and I figured that it is probably a very confusing issue to many that are not in the business on a day-to-day basis like I am.

You have probably heard the terms tax-deferred exchange, tax-deferred swap, deferred exchange, like-kind exchange, like-kind swap, starker exchange, tax-free exchange, tax-free swap, forward exchange, regular exchange, normal exchange, real estate exchange, personal property exchange, and probably a few more that I can not think of right now.

Will The Real 1031 Exchange Please Stand Up

So, which one is the real deal? The bottom line answer is that they all are. The names referenced above all refer to the exact same thing: they are all 1031 exchanges. The only difference would be whether they are closed on a simultaneous (concurrent) or delayed basis, but they are all still the real 1031 exchange. The only name that I didn't include is the delayed exchange, because it refers only to those transactions where the sale closes first and the purchase is closed within 180 calendar days.

Other Types of 1031 Exchanges

There are other types of 1031 exchange structures that refer to a more specific strategy such as safe harbor reverse 1031 exchanges, non-safe-harbor reverse 1031 exchanges, build-to-suit 1031 exchanges that are also referred to as construction or improvement 1031 exchanges, as well as more sophisticated or advanced strategies.

So, there you have it.