BUILD TO SUIT EXCHANGES
Also referred to as a construction or improvement like-kind exchange, these transactions allow the taxpayer to build, construct, or make capital improvements to a property before acquiring it as a replacement. Exchange proceeds from the relinquished property may be used to fund the construction or build-out within certain guidelines. An Exchange Accommodation Titleholder (EAT) may hold the property during construction as part of a Parking Arrangement. The Qualified Intermediary (Accommodator) controls exchange funds for acquisition of replacement property and payment of construction costs. By the end of the 180-day holding period for the exchange, the improved replacement property is transferred to the taxpayer to complete the tax-deferred exchange. Structuring a Build-To-Suit Exchange may allow the taxpayer to purchase a replacement property of lower value, and make capital improvements to increase the value to equal or greater than the relinquished property- thereby avoiding tax liability.
 

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EXCHANGES PERFORMED NATIONWIDE : 1 800 500 1031 : LOCAL OFFICES IN SANTA FE & TELLURIDE : INFO@A1031EXCHANGE.COM

 

 

The information on this website is an educational resource only, and not intended as legal, accounting, or tax advice of any kind.
It is recommended that you consult with your own attorney or tax advisor for details before choosing to engage in a 1031 Exchange