Delayed Exchange Legal Meaning and Definition

Here is a simplified definition of the legal term Delayed Exchange.

Delayed Exchange (noun)

A method under IRS Code sec. 1031 that allows the funds from the sale of one property to be placed in a binding trust for up to 180 days, while the seller acquires another property. This process delays the payment of capital gain taxes. Also known as a "Starker," named after the individual who successfully used this method and won an IRS lawsuit.