accommodating party

accommodating party

A third party who holds money or other property for a short period of time in order to facilitate a tax-free exchange under Section 1031 of the IRS Code.The third party is called a qualified intermediary in the tax regulations.

Example: Jack sells his office building to Jill for $400,000. Jill pays the money to Larry Lawyer, who keeps it in his escrow account. Larry is the accommodating party. When Jack meets the timing requirements of Section 1031 and wants to buy an apartment building for $1,000,000, Larry will write a check to the seller for $400,000 and Jack will pay the remaining $600,000. In common language, Jack can't have his fingerprints on the money, so an accommodating party is necessary.

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References in periodicals archive ?
On September 15, 2000, the Internal Revenue Service released Revenue Procedure 2000-37 that provided guidelines for structuring reverse exchanges (a transaction in which replacement property is acquired by an accommodating party before the sale of the relinquished property and held as replacement property to complete the exchange).
A replacement property may be acquired and held (sometimes called "parked") by the accommodating party for up to 180 calendar days.
The property has meeting and banquet rooms for small or mid-sized conferences and events, accommodating party sizes from 12 to 150 attendees.
Tax shelters require both taxpayers looking for a benefit and, as a minimum, one accommodating party that will act along with the taxpayer to structure a transaction to meet certain criteria.
But among unionists, David Trimble's more accommodating party is in a fierce electoral fight to the finish with Ian Paisley's totally uncompromising party.
provides taxpayers with a means of qualifying their transactions by allowing them to treat the accommodating party in certain ''parking transactions'' as the owner of the property.