Bowling Alley Misconception

One of our exchanger’s is selling (exchanging) a bowling alley for an interest in a shopping center.  The taxpayer (Exchanger) was very upset because he was told by a “professional” that he had to conclude a simultaneous transaction in order to have a valid Section 1031 tax deferred exchange. So let me correct one of the many misconceptions about 1031 exchanges.  A one-for-one simultaneous exchange need not take place.  In a standard forward delayed exchange (the most common type of exchange), property is sold (Relinquished Property) and Replacement Property is purchased (Replacement Property) within 180 days following the sale of the Relinquished Property.  I’ll write about some other misconceptions in the next couple of days.