The short answer
The exchanger is the taxpayer who transfers the relinquished property and receives the replacement property; the Code and regulations simply call that person the taxpayer, and the same taxpayer must stand on both sides. For tax purposes the taxpayer is the person who files the return, so a single-member LLC disregarded under the entity classification rules is looked through to its owner, while a multi-member LLC taxed as a partnership is its own taxpayer. The intermediary is never the taxpayer, even though it may appear on the closing documents.
At a glance
| Legal term | The taxpayer, in section 1031 and Reg. section 1.1031(k)-1 |
|---|---|
| Same on both legs | The taxpayer who transfers must be the taxpayer who receives |
| Single-member LLC | Disregarded; treated as a branch or division of its owner |
| Not the taxpayer | The qualified intermediary or any other safe harbor party |
The term comes from the statute's own wording, which names one taxpayer from start to finish.
Section 1031(a) speaks of property received by the taxpayer and property the taxpayer transfers, and Reg. section 1.1031(k)-1(a) defines a deferred exchange as one in which the taxpayer transfers relinquished property and subsequently receives replacement property. The word exchanger is market shorthand for that taxpayer.
Paragraph (g)(1) of the same regulation adds that for the safe harbor rules the taxpayer does not include a person or entity used in a safe harbor, such as a qualified intermediary. The Form 8824 instructions put the filing duty on whoever transferred property in a like-kind exchange during the year.
Only the exchanger needs to qualify. In Rev. Rul. 2004-86, B and C exchange their properties through a qualified intermediary for interests sold by A, and the ruling notes that A does not engage in a section 1031 exchange. The buyer of your old property and the seller of your new one can be ordinary cash parties.
Entity classification decides who the taxpayer is when title sits in an LLC.
Reg. section 301.7701-2(a) says a business entity with one owner is classified as a corporation or is disregarded, and if disregarded its activities are treated as a sole proprietorship, branch or division of the owner. A business entity with two or more members is classified as a corporation or a partnership.
Hypothetically, you own a rental through a single-member LLC that has never elected corporate treatment. The LLC sells, and you buy the replacement in your own name or in a new single-member LLC. For tax purposes you are the taxpayer on both legs. If instead the LLC has two members and is taxed as a partnership, the partnership is the taxpayer and must be the buyer; see whether an LLC can do a 1031. Check the classification with your CPA before you list.
It bites when title changes hands between the sale and the purchase.
Mismatches arise when spouses, siblings or partners sell together and then want to buy separately, or when a partnership dissolves mid-exchange. The same-taxpayer rule guide covers those structures, and moving from a personal name into an LLC and selling in your own name and buying in a revocable trust handle two common variations.
Disregarded entities also matter for related-party testing: the Form 8824 instructions treat an exchange made by a disregarded entity owned by you or a related party as an indirect exchange with a related party.
Related questions
Can my spouse be added to title on the replacement property?
Adding a new owner changes who the taxpayer is on the receiving side for that share, so it needs planning with your CPA before closing. See adding a spouse to title on replacement property.
Is the qualified intermediary the seller on my closing documents?
The intermediary may be treated as acquiring and transferring the property, but the regulation says it is not the taxpayer for the safe harbor rules, and you, not the intermediary, report the exchange on Form 8824.
When I buy a DST interest, am I still the exchanger?
Yes. Under Rev. Rul. 2004-86 an investor in a qualifying Delaware statutory trust is treated as owning an undivided fractional interest in its real estate, so you remain the taxpayer acquiring replacement property.
Sources
Checked against these publications on September 30, 2026. Rules and figures change; confirm the current version with your CPA or attorney before you act. This page is general information, not tax or legal advice.