Reverse 1031 Exchange in Florida: What You Need to Know
- Laurene Rodriguez
- Nov 10, 2025
- 2 min read
In Florida’s competitive real estate market, the property you want may not stay available for long. A reverse 1031 exchange allows you to acquire your replacement property first and sell your current investment property afterward, all while deferring capital gains taxes. This approach can be incredibly useful, but it comes with specific rules, deadlines, and structural requirements.
Below, we break down how reverse 1031 exchanges work in Florida, when they make sense, and what to keep in mind before deciding whether this strategy is right for you.
How a Reverse 1031 Exchange Works
A reverse exchange follows the same IRS Section 1031 rules as a standard exchange, but the order of operations is reversed. Instead of selling first and buying second, you buy first and sell second.
Here’s what that looks like in practice:
You acquire your replacement property before selling your current one.
A Qualified Intermediary (QI)Â or Exchange Accommodation Titleholder temporarily holds the title or funds during the exchange.
You then have up to 180 days to sell your original property.
Once the sale is complete, the exchange is finalized and capital gains taxes are deferred.
Because the investor is not allowed to hold both properties simultaneously in a way that violates 1031 rules, using a trusted Qualified Intermediary is essential.
Benefits of a Reverse 1031 Exchange in Florida
Florida’s fast-moving real estate markets (especially in cities like Tampa, Miami, and Orlando) make reverse exchanges particularly appealing.
1. Secure the Property You Want
If you find the perfect replacement property but haven’t sold your current one yet, a reverse exchange lets you lock it in before someone else does.
2. Stay IRS-Compliant While Deferring Taxes
A reverse exchange still qualifies for capital gains tax deferral, just like a standard 1031 exchange — as long as it’s executed correctly.
3. Avoid Rushed Decision Making
Instead of scrambling to purchase under pressure, you can take time to find the right buyer for your original property.
Things to Consider Before Starting a Reverse Exchange
While reverse 1031 exchanges offer flexibility, they are not always the simplest route.
More Complex Structure:Additional legal and financial coordination is required.
Higher Transaction Costs:Holding title and compliance steps typically add administrative expenses.
Strict Deadlines Still Apply:Even though you buy first, you still must sell the original property within 180 days.
The Bottom Line
A reverse 1031 exchange can be a powerful strategy in Florida, especially when opportunities move quickly. However, it’s important to have experienced guidance to keep the exchange on track and IRS-compliant.
Is a Reverse 1031 Exchange Right for Your Florida Property?
Sunwest helps investors navigate both standard and reverse 1031 exchanges with clarity, confidence, and secure transaction handling.
We ensure:
Proper title structuring
IRS deadline compliance
Smooth communication between lenders, agents, and closing teams
Ready to explore your options?Contact Sunwest to discuss whether a reverse 1031 exchange is the right fit for your situation — and to get clear, actionable guidance based on your goals.