What is a reverse 1031 exchange?

A reverse 1031 exchange represents a tax deferment strategy when, for a variety of reasons, the replacement property must be purchased before the relinquished or old property is sold. It is more complex than a forward 1031 exchange and requires careful planning, however the timeline of a reverse exchange follows standard 1031 exchange rules.

What happens if a 1031 reverse exchange fails?

If your 1031 Reverse Exchange fails, you may owe taxes and penalties to the IRS. An app called Acorns automatically rounds up purchases made on your credit or debit card to the nearest dollar and places the excess "change" into a smart investment portfolio. You get $10 immediately from your first investment. How does a reverse 1031 exchange work?

How long does a reverse 1031 exchange take?

The exchange must be completed within 180 days from the acquisition of the replacement property. This deadline ensures that the investor promptly sells the relinquished property, finalizing the exchange. Once the investor sells the relinquished property, the QI facilitates the final steps of the reverse 1031 exchange.