A Qualified Exchange Accommodation Arrangement (QEAA) is a safe harbor provided by the IRS that allows taxpayers to use a “parking” arrangement in a reverse exchange to qualify as a like-kind exchange under Section 1031. In a reverse exchange, the replacement property is acquired before the relinquished property is transferred, which is not covered by the like-kind exchange regulations.


To meet the conditions of a QEAA, the following requirements must be satisfied:

1. An exchange accommodation titleholder must hold qualified indicia of ownership of the property from the date of acquisition until it is transferred.

2. The taxpayer must have a bona fide intent that the property held by the titleholder represents either replacement property or relinquished property in an exchange intended to qualify for nonrecognition of gain or loss under Section 1031.

3. Within 5 business days of transferring the qualified indicia of ownership to the titleholder, the taxpayer and the titleholder must enter into a written QEAA agreement that specifies the purpose of the arrangement and the treatment of the titleholder as the beneficial owner for tax purposes.

4. Both parties must report the federal income tax attributes of the property on their tax returns consistent with the agreement, even if there are differences in accounting, regulatory, or state, local, or foreign tax treatment.

5. Within 45 days of transferring the qualified indicia of ownership of the replacement property to the titleholder, the relinquished property must be properly identified.

6. Within 180 days of transferring the qualified indicia of ownership to the titleholder, the property must be transferred to the taxpayer as replacement property or as relinquished property to a person who is not the taxpayer or a disqualified person.

7. The combined time period that the relinquished property and the replacement property are held in a QEAA must not exceed 180 days.


It’s important to note that the terms used in Revenue Procedure 2000-37 may differ from the terms used in Section 1.1031(k)-1(c) regarding the identification of the replacement property and the relinquished property. This difference is intentional to accommodate reverse exchanges where the replacement property is “parked” until the relinquished property is acquired.

Complying with the conditions of a QEAA can help taxpayers successfully execute a reverse exchange and qualify for tax-deferred treatment under Section 1031. However, it is advisable to consult with a tax professional or attorney to ensure compliance with all requirements and to navigate the complexities of a QEAA.