delayed exchange


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delayed exchange

n. an exchange of property to put off capital gain taxes, in which the funds are placed in a binding trust for up to 180 days while the seller acquires an "exchanged" (another similar) property, pursuant to IRS Code sec. 1031. It is sometimes called a "Starker" after the man who first used this method and survived an IRS lawsuit.

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References in periodicals archive ?
What do I need to do?" Below is a step by step guide to what needs to be done and when to initiate and complete a delayed exchange.
where [y.sub.t] represents the variable changes at time t (Portfolio flow or industrial production index or delayed exchange rates) at time t; xt represents the unobservable state variable; [h.sub.t] denotes the variance of transitory components which determines the short-term uncertainty.
The client can also set up a delayed exchange and still take advantage of the tax deferral.
The time limits for completing the delayed exchange are hard and fast.
A forward exchange occurs when a taxpayer sells the relinquished property, then later buys a replacement property within delayed exchange safe harbors, such as qualified intermediary and qualified escrow account [Treas.
In 1984, Congress wrote a law formalizing the delayed exchange process, Nelson said.
Although the Fitzgeralds really like the property, the timing doesn't meet the requirements of the easier-to-complete normal delayed exchange.
[7] Delayed exchange is more usual but is, by no means, a unitary phenomenon.
Starker, the notion of delayed exchange was presented and affirmed by the Ninth Circuit Court of Appeals.
The taxpayer receiving such payments prior to the completion of the delayed exchange is deemed to receive the economic benefit of the property value to which the interest or growth factor applies.
Recently, the IRS provided guidance (See ILM 200836024) approving the combination of a reverse parking arrangement exchange and a forward delayed exchange resulting in two sequential 180 day exchange periods associated with one exchange transaction.
If the seller is willing to extend the closing date to give the investor time to sell his or her existing property, a standard delayed exchange is feasible.