Exchange Structures
Seattle Reverse Exchange Execution
A reverse exchange lets you acquire replacement property before your relinquished property closes, which matters in a competitive Seattle, WA market where a strong replacement asset can sell before a conventional forward exchange would let you act. Because the taxpayer cannot hold title to both properties simultaneously, an exchange accommodation titleholder parks title to one property while the other transaction is completed, under the safe harbor described in Revenue Procedure 2000-37. We coordinate the parking entity, financing, and closing logistics so the structure stays compliant within the one hundred eighty day parking period.
What You Get
Key Outcomes
Confirm formation of the exchange accommodation titleholder and manage its documentation requirements
Align lender requirements with the parking arrangement, since not every lender is comfortable financing a parked property
Track construction or stabilization milestones if the parked property requires work during the hold period
Sequence the relinquished property sale so both legs of the exchange close within the required window
Deliverables
What We Deliver
- A reverse exchange process map with clearly defined responsibilities for each party
- A financing and guaranty alignment plan addressing how the parked property is collateralized
- A weekly timeline tracker feeding updates to your qualified intermediary and exchange accommodation titleholder
- A closing checklist confirming both legs of the exchange satisfy the one hundred eighty day parking limit
Process
Execution Timeline
Week 0: Reverse exchange kickoff, structure confirmation, and intermediary engagement
Week 1: Exchange accommodation titleholder formation and lender approval for the parked property
Weeks 2 through 6: Milestone tracking leading toward the relinquished property sale
Week 26 at the latest: Both legs of the exchange must close, since the safe harbor parking period caps at one hundred eighty days
Common Questions
Frequently Asked
How long can the exchange accommodation titleholder hold the property in Seattle, WA?
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Under the safe harbor in Revenue Procedure 2000-37, the parking arrangement is limited to one hundred eighty days. We manage the milestone schedule so the relinquished property sale and the replacement property conveyance both complete within that window, regardless of whether the property sits in Seattle or elsewhere in the region.
Do you provide intermediary services?
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No. We coordinate with your selected qualified intermediary and exchange accommodation titleholder while focusing on project management, lender alignment, and documentation support for the reverse exchange in Seattle, WA. Holding exchange funds or title is a role reserved for the intermediary and accommodation titleholder, not for us.
Can the parked property be improved during the hold period?
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Yes, if planned carefully within the one hundred eighty day window; this is sometimes structured as a combined reverse and improvement exchange. We coordinate construction budgets and draw schedules with the exchange accommodation titleholder to maintain compliance, since improvements made after the parking period ends do not count toward the exchange value.
Why would I use a reverse exchange instead of a standard forward exchange?
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A reverse exchange is useful when you find the right replacement property before your relinquished property has sold, or when you need to move quickly in a competitive market and cannot risk losing the asset while waiting to close your existing sale. It is more complex and typically more expensive to execute than a forward exchange, so it makes the most sense when timing genuinely requires it.
Is a reverse exchange more expensive than a standard exchange?
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Generally yes. The exchange accommodation titleholder entity, additional legal work, financing for the parked property, and coordination costs add expense compared with a standard forward exchange. We help you weigh that added cost against the benefit of securing the right replacement property before it is lost to another buyer.
What happens if my relinquished property does not sell within the one hundred eighty day window?
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The reverse exchange fails if the relinquished sale does not close in time, and the transaction is unwound according to the parking arrangement's terms, which can trigger tax consequences on the parked property. This is why we build in milestone checkpoints early, so a stalling relinquished sale is identified with enough time left to address it rather than discovered near the deadline.
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