Starker Exchange, also known as a delayed exchange, is a type of 1031 exchange where the investor does not receive the replacement property within the standard 45-day identification period and 180-day exchange period. Instead, the investor has a longer period of time to identify and acquire the replacement property.
Key-Takeaway
- A Starker exchange is a type of 1031 exchange where the investor has a longer period of time to identify and acquire the replacement property.
- The investor has up to 180 days from the sale of the old property to identify potential replacement properties and up to an additional 180 days to acquire the replacement property.
Example
Consider an investor who wants to sell a rental property and purchase a new rental property using a 1031 exchange. The investor sells the old property and the proceeds are held by a qualified intermediary. The investor then has up to 180 days from the sale of the old property to identify potential replacement properties and up to an additional 180 days to acquire the replacement property.
Tips
- Consider the benefits and drawbacks of using a Starker exchange, including the added time and administrative requirements.
- Plan ahead and be aware of the deadlines and requirements for a Starker exchange.
Advice
- Seek professional guidance from a qualified intermediary and a tax advisor to determine if a Starker exchange is the best option for your specific situation.
- Be aware of the strict rules and requirements for a 1031 exchange, including the need to complete the exchange within the specified timeframe.
Recommendations
- Consider using a Starker exchange if you need additional time to identify and acquire the replacement property in a 1031 exchange.
- Take the time to understand the requirements and rules for 1031 exchanges and Starker exchanges, and seek professional guidance if necessary.
