park

Under a reverse or "parking" exchange, an unrelated third party (sometimes called a parking entity or qualified intermediary) acquires and "warehouses" the replacement property until the investor sells the original property and is free to purchase the parked property from the third party.

To be covered under the safe harbor protections, the taxpayer must enter into a written agreement--referred to as the qualified exchange accommodation agreement or QEAA--within five business days of the date the exchange accommodation title holder (AT) first acquires the parked property.

* Taxpayer has a bona fide intent to use the parked property to complete a section 1031 tax-deferred exchange.

If the sale proceeds from the relinquished property exceed the purchase cost of the replacement property, the excess funds may be used in a deferred exchange in which the parked replacement property is but one of the replacement properties; others may be identified and received within the Sec.

Any moderate delay in selling the parked relinquished property will make it impossible to complete a deferred exchange funded by any excess relinquished property value.