Qualified Exchange Accommodation Arrangements

A qualified exchange accommodation arrangement (QEAA) is a structure that allows an investor to defer capital gains taxes on the sale of a property by exchanging it for another property of equal or greater value. The QEAA is typically used by investors who are looking to sell a property but do not want to pay the capital gains taxes that would be due on the sale.

The QEAA works by having the investor sell the property to a qualified intermediary, who then holds the property for the investor until the investor is ready to purchase a new property. The investor then uses the proceeds from the sale of the original property to purchase the new property from the qualified intermediary.

The QEAA allows the investor to defer the capital gains taxes on the sale of the original property until the new property is sold. This can be beneficial for investors who are not ready to purchase a new property immediately or who are concerned about the future value of the new property.

There are a number of requirements that must be met in order for a QEAA to be considered valid. These requirements include:

* The investor must be a U.S. citizen or resident.
* The property must be held for at least 180 days before it is sold.
* The investor must use the proceeds from the sale of the original property to purchase a new property of equal or greater value.
* The new property must be held for at least 180 days before it is sold.

If the investor fails to meet any of these requirements, the QEAA may be considered invalid and the investor may be subject to capital gains taxes on the sale of the original property.

The QEAA is a complex structure and there are a number of potential risks associated with it. Investors should consult with a qualified tax advisor before entering into a QEAA.