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In an "exchange first" method, RES, acting as the Exchange Accommodation Titleholder (EAT), purchases and "parks" the relinquished property, and the Exchanger completes the 1031 exchange by acquiring the Replacement Property (through the QI). RES will then sell the relinquished property within the 180-day "safe harbor" period. The reverse exchange documents prepared by RES give the Exchanger the benefit of any profit, and make the Exchanger liable for any shortfall, on RES' resale of the relinquished property.
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