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Combination Revers and Forward Exchanges

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A combination forward/ reverse exchange may be the solution if one or more of these conditions exist:

  • The taxpayer is selling multiple properties to purchase a larger or multiple replacement properties but their scheduled closing dates extend beyond the 180 window.
  • The taxpayer is buying a replacement property which is larger than a single relinquished property and the taxpayer has more than one property to sell.
  • The aggregate value of several potential relinquished properties approximates the value of the larger replacement property.
  • Not all of the relinquished properties close before the expected closing date on the replacement property, so a complete forward exchange is not possible.

Purchase a percentage of the replacement property equal to the aggregate value of the relinquished properties already closed as a forward exchange, and simultaneously purchase the additional percentage of the replacement in a reverse exchange. If pushed to the limits, the total exchange period for the forward and reverse combined can extend up to 360 days.