Simultaneous Exchange: This type of exchange is when the closing for the sale of the Relinquished Property and the closing on the purchase of the Replacement Property occur back-to-back, on the exact same day.

Delayed Exchange: This type of exchange is when the closing date for the purchase of the Replacement Property occurs after the closing date for the sale of the Relinquished Property occurs. A Section 1031 tax deferred exchange is rarely a two-party swap of real  estate. Most exchanges are delayed exchanges, whereby the Taxpayer has 180 days from the closing date of the sale of the Relinquished Property to the closing date of the            purchase of Replacement Property to occur. The closing for the purchase of the Replacement Property can occur earlier than the 180 days but in no event, later than the 180-day timeline. Taxpayer must also identify the potential Replacement Property(ies) within 45 days from the closing date on the sale of the Relinquished Property.

Reverse Exchange: This type of exchange is when the closing date for the purchase of the Replacement Property occurs prior to the closing date for the sale of the Relinquished Property. Usually the qualified intermediary takes title to the Replacement Property and holds title until the Taxpayer closes on the sale of the Relinquished Property. Thereafter or as part of the closing for the sale of the Relinquished Property, the qualified intermediary will convey title to the Replacement Property to the Taxpayer.

Improvement Exchange: This type of exchange is when a Taxpayer wants to purchase  property and arrange for construction of improvements on the property before it is          purchased as Replacement Property. The improvements are typically a building on an unimproved lot, but could also include improvements made to an already improved    property in order to create adequate value with no boot occurring. IRS Code and Regulations do not allow a Taxpayer to construct improvements on a property as part of an exchange after Taxpayer has already taken title to the Replacement Property. It is              necessary that the qualified intermediary close on the purchase, take title and hold title, until the improvements are constructed. Title will then be conveyed by the qualified          intermediary to the Taxpayer as the Replacement Property. This type of exchange is done in the context of both a Delayed Exchange and a Reverse Exchange, depending on the circumstances.

Contact Black Hawk Exchange, Inc. for more information regarding the different options for 1031 tax deferred exchanges.