The short answer
A simultaneous exchange is a like-kind exchange in which your relinquished property and your replacement property change hands at the same time, so there is no gap for the 45-day and 180-day deadlines to measure. It can be a direct swap between two owners, a three- or four-party exchange where title comes from someone other than your buyer, or a same-day closing run through a qualified intermediary. The identification and exchange-period deadlines in section 1031(a)(3) are measured for property received after the transfer, so a true same-time exchange has nothing for them to measure.
At a glance
| Timing | Both properties transfer at the same time |
|---|---|
| Deadlines | The 45-day and 180-day rules address replacement received after the transfer |
| QI rule | Reg. section 1.1031(b)-2: the QI is not your agent in a simultaneous exchange |
| Cash to balance | Money received is taxable boot up to the gain |
The term covers any exchange with no gap, and the regulations give it its own intermediary rule.
Section 1031(a)(1) defers gain when real property held for business or investment is exchanged solely for like-kind real property. Section 1031(a)(3) adds identification and receipt deadlines measured from the day you transfer the relinquished property, and Reg. section 1.1031(k)-1(a) defines a deferred exchange as one where you transfer property and subsequently receive replacement property. A same-time transfer is the case those rules do not need to reach.
Reg. section 1.1031(b)-2 provides that in simultaneous transfers of like-kind properties involving a qualified intermediary, as defined in the deferred exchange regulations, the intermediary is not your agent and the transfer and receipt are treated as an exchange. Publication 544 adds that three- and four-party transactions can qualify, and that you can treat it as an exchange even when title comes from a third party rather than the person you deal with.
The term also appears inside reverse exchanges. Rev. Proc. 2000-37 describes parking arrangements in which the accommodation party holds the replacement property until you arrange the transfer of your relinquished property in a simultaneous or deferred exchange, at which point the two properties are swapped.
In a hypothetical two-party swap, the cash that balances values is the taxable part.
Hypothetically, you own a fourplex worth $800,000 with a $300,000 adjusted basis and no debt. A neighbour owns land worth $750,000 that you want for investment, and wants your fourplex. You deed to each other on the same day and the neighbour pays you $50,000 to balance.
Your realised gain is $500,000. Under section 1031(b) gain is recognised up to the money received, so $50,000 is taxable and $450,000 is deferred. If you wanted no recognised gain, the values or the debt would have to balance without cash coming to you. Run your own numbers with your CPA.
It bites when a same-day closing is really a sale followed by a purchase.
Reg. section 1.1031(k)-1(a) says a sale of property followed by a purchase of like-kind property does not qualify, and Publication 544 says the transaction must be property for property, not property for money used to buy the replacement. Sale proceeds paid to you, even for an hour, can turn two same-day closings into a sale and a purchase.
That is the reason to run a same-day closing through an intermediary, with the contracts assigned to it; see assignment of contract to the QI. If the replacement closes later, the deferred rules apply; see the 45 days inside the 180 days and closing replacement within 45 days.
Related questions
Do I need a qualified intermediary for a simultaneous exchange?
Not in a true two-party swap where each owner deeds directly to the other. In a three-party deal, the intermediary rule in Reg. section 1.1031(b)-2 is what treats the same-day sale and purchase as an exchange rather than a sale and a purchase.
Does a simultaneous exchange have to be reported on Form 8824?
Yes. The Form 8824 instructions require the form for any like-kind exchange of real property in the year you transferred property, whether or not it was deferred.
What if my replacement closes a day after my sale?
Then the replacement is received after the transfer, and the deferred exchange rules apply, including identification and the exchange period. Property received before the end of the identification period is treated as identified. See what happens if the buyer wires proceeds to the title company.
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.