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The IRS Revenue Procedure 2000-37 creates the presumption that if RES owns the "parked" property for not more than 180-days the transaction will qualify as a 1031 exchange and the transaction falls within the "safe harbor" of the Rev. Proc. If the Exchanger does not acquire the parked property from RES within the 180-day period, the "safe harbor" presumption will not be available and the transaction is referred to as a non "safe harbor" transaction.
RES acts as an Exchange Accommodation Titleholder ("EAT") in "Safe Harbor" reverse exchanges and our affiliate Consolidated Resource Management, Inc. acts as a principal for non "safe harbor" exchanges.
If RES acquires the Replacement Property ("exchange last"), the
Exchanger must "identify" the intended relinquished property within 45 days of the date RES acquires the Replacement Property. The Exchanger can provide 100% financing to RES for the purchase of the "parked" property.
The "safe harbor" also permits the leasing of the parked property by RES to the Exchanger on a net-lease basis with nominal rent. RES must, however, report the ownership of the parked property on its own tax return.
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