Simultaneous Exchange
An exchange in which the taxpayer acquires replacement property at the same time that he or she transfers title to the relinquished property.
Investors performing such an exchange without the benefit of a Qualified Intermediary may risk losing the tax deferred status of the transaction, especially if there are three parties involved.
A Qualified Intermediary becomes the fourth party who transfers ownership to the proper entities and insulates the exchanger from constructive receipt issues on the proceeds. The Qualified Intermediary becomes the accommodating party, thus protecting the Exchanger, buyer and seller.
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"No gain or loss shall be recognized if property held for productive use in a trade or business or for investment purposes is exchanged solely for property of a like-kind."
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