A Section 1031 Reverse Exchange is appropriate when a client needs or desires to purchase replacement property before the property to be relinquished is sold.
In such situations, the IRS requires that an Exchange Accommodation Titleholder (EAT) temporarily take title to the property being purchased. Rattikin Exchange has formed a separate holding entity, Texas Reverse Exchange Holding Company, L.L.C., to act as the Exchange Accommodation Titleholder. Texas Reverse will hold the title until the client sells the property that is subject to the potential capital gains tax. The property must be sold within 180 days of closing on the replacement property.