This allows the Taxpayer to comply with the "relinquish first, replace later" order, while satisfying a market requirement to close on the replacement property.
An improvement exchange occurs when the Taxpayer wants to acquire replacement property and build improvements on it during the exchange period. This usually occurs when the Taxpayer determines that he will have exchange funds in excess of the cost of the replacement property. The excess equity is used to construct improvements on the replacement property.
See articles below for additional information on reverse and improvement exchanges.
Reverse 1031 Exchanges
Reverse Exchanges after Revenue Procedure 2000-37
The Reverse Exchange - An Overview