There are numerous types of 1031 exchanges. Finding the right one for your situation is important, but it can be difficult if you aren’t familiar with the options available to you. This article is all about the 1031 parking exchange. We’ll discuss what a parking exchange is and when it can be useful in deferring capital gains taxes on the sale of real estate.
What is a Parking Exchange?
A parking exchange is essentially another name for a reverse exchange, in which the taxpayer “parks” their replacement property with an EAT (Exchange Accommodation Titleholder) while they wait for their exchange to complete. In a reverse exchange, the taxpayer acquires their replacement property before selling their relinquished property. However, the exchangor is not allowed to simultaneously hold title to both their relinquished property and their replacement property. This isn’t an issue in a typical forward exchange, but it does become an issue with a reverse exchange. The solution is to park the replacement property with the EAT until the taxpayer is ready to finish their exchange and sell the relinquished property.
Get Started with Your 1031 Exchange
To get started with your 1031 real estate exchange, contact a qualified intermediary today. The team of intermediaries at CPEC1031 has been providing 1031 exchange services to clients in Minnesota and across the country for more than twenty years. We have the knowledge and the expertise needed to ensure that your exchange is successful. Contact us today at our downtown Minneapolis office to set up a time to chat with one of our 1031 exchange specialists.
Start Your Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
Defer the tax. Maximize your gain.
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