Forward (Delayed) Exchange

The Forward (Delayed) 1031 Exchange allows you to sell your old or existing property (the “relinquished property”) before acquiring a new property (the “replacement property”). 

The first step you will take in this exchange will be to market and secure a buyer for your old (“relinquished”) property. A qualified intermediary assists you in retaining more of your capital from the sale of your property.  This is accomplished by ‘rolling your cost basis’ to the new (“replacement”) property. Once you consummate your transaction with the buyer (record the deed conveying title), on the sale of your old (“relinquished”) property, you have up to 45 days to identify a new (“replacement”) property (or multiple properties) and up to 180 days to formally acquire title to one or more of those properties, subject to certain restrictions. Your qualified intermediary will oversee this process to not only protect your funds, but ensure that the exchange is compliant with IRS regulations.

Why Choose a Forward (Delayed) Exchange?

A Forward or Delayed Exchange is the most common 1031 Exchange because it allows investors a longer timeline, but requires and involves the expertise of a qualified intermediary. Among the many other advantages to a Forward (Delayed) Exchange include:

  • Exchange by another name.  This type of Exchange can be referred to by many names; Forward Exchange, Delayed Exchange, 1031 Exchange, Tax Deferred Exchange and Starker Exchange.
  • Sell first, buy later. Rather than worrying about multiple transactions at the same time, a Forward (Delayed) Exchange allows you time to consider what you really want to do. You’ll have the flexibility of seeking out expert help and considering several replacement properties to determine which one(s) best fit your needs.  This can eliminate you purchasing with ‘a contingent sale’, which may limit your options.
  • Tax deferral. With a Forward (Delayed) Exchange, you can dispose of your relinquished property without capital tax gain in the current tax year. We call this a deferred tax advantage, which works for your financial benefit. You’ll keep all your capital working for you, rather than the government.
  • Intermediary expertise. Most Forward (Delayed) Exchanges require the expert assistance of a qualified intermediary. Not only will your intermediary protect the funds in your account, but they can facilitate communication between all parties involved—you, the buyer, the seller, and others. They will also provide a detailed roadmap of the transactional process, helping you every step of the way.
  • Concurrent Exchange. Practically speaking, it’s difficult to secure a Concurrent Exchange. A Concurrent Exchange occurs when two parties with similar equities trade properties. While this is generally rare, it is possible. Seeking out the services of a qualified intermediary to memorialize the Concurrent Exchange can be vital.

Get Started on Your Forward (Delayed) Exchange Today

Are you interested in a Forward (Delayed) 1031 Exchange? If so, contact Prime West Exchange, Inc. Our staff is made up of leading authorities in the real estate industry, and we provide expert intermediary services to help you secure your Forward (Delayed) 1031 Exchange. To begin, contact our office by phone at (818) 442-2228.