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Types of Exchanges
A Simultaneous Exchange is a deal that is extremely short-lived lasting only one
day. The closing of the relinquished property and the closing of the
replacement are executed concurrently. While in a Delayed Exchange the
replacement property is bought subsequent to the closing of the relinquished
property, a Reverse Exchange is just the opposite. The replacement is purchased
prior to the selling of the relinquished; the Qualified
Intermediary holds title until the taxpayer has sold the property. An
Improvement Exchange is similar to the Reverse Exchange. The taxpayer acquires
the replacement property for the purpose of making arrangements for
construction before it is classified as a replacement. The Qualified Intermediary takes title of the land for the time being.
Nonetheless, personal property must be exchanged for its mirror-image
equivalent.
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