Reverse exchange — Rev. Proc. 2000-37 QEAA safe harbor

They said reverse
can't be automated.
We did.

Open1031 automates the full reverse 1031 exchange — EAT/SPE LLC formation, QEAA qualification, the 5-business-day window, and the 180-day parking clock — running 24/7 as a durable workflow that cannot miss a deadline.

Segregated qualified escrow 5-day QEAA window — automated 180-day clock runs 24/7 Rev. Proc. 2000-37 anchored
Reverse Hub QEAA Active
Exchange clocks running
3 days left — QEAA window Rev. Proc. 2000-37
152 days left — 180-day parking §1031
EAT / SPE LLC Formed — holds title
Replacement property 742 Evergreen Terrace, Phoenix AZ
Relinquished property 456 Sunset Blvd, Los Angeles CA synthetic
QEAA window closes in 3 days. I'll draft the QEAA agreement and file it with the EAT — want me to proceed?
Open1031 vs. every other QI
Most QIs say "no" to reverse exchanges,
or charge a premium and hand it to an attorney.

Open1031 automates what they avoid — the EAT/SPE LLC formation, QEAA qualification, parking clock management, and fund-release approvals — as a durable, audited workflow.

Plain-English explainer

What is a reverse 1031 exchange?

In a standard forward exchange you sell first, then buy. In a reverse exchange you buy the replacement property before you sell the relinquished one. The problem: you can't hold both properties in a 1031 exchange at the same time — so you need an independent entity to temporarily hold title.

How the Exchange Accommodation Titleholder (EAT) works

The platform orchestrates formation of an Exchange Accommodation Titleholder — a single-purpose entity (SPE LLC) — that takes legal title to the replacement property and "parks" it while you complete the sale of your relinquished property. The EAT exists solely for this exchange; it holds nothing else.

You (exchanger)
funds replacement
EAT / SPE LLC
(parks title)
holds title ≤ 180 days
Replacement Property
title parked safely
You (exchanger)
sells relinquished
Qualified Escrow
(QI of record holds)
proceeds held safely
EAT transfers title to You
exchange completes

Exchange-first vs. exchange-last: two valid paths

Exchange-first

EAT buys replacement first

You identify the replacement before you've sold the relinquished property. The EAT acquires the replacement, parks title, and you complete the sale within the parking period.

  1. Platform orchestrates EAT / SPE LLC formation
  2. EAT acquires replacement property
  3. You sell relinquished — proceeds to qualified escrow
  4. Exchange funds flow from escrow to EAT
  5. EAT transfers title to you — exchange complete
Exchange-last

EAT holds relinquished first

You've already found the replacement but haven't sold yet. The EAT takes title to your relinquished property, you buy the replacement, then complete the sale through the EAT.

  1. Platform orchestrates EAT / SPE LLC formation
  2. EAT takes title to your relinquished property
  3. You acquire the replacement property directly
  4. EAT sells relinquished — proceeds to qualified escrow
  5. Exchange closes — proceeds complete the transaction
The critical clock

The 5-business-day QEAA window

Under Rev. Proc. 2000-37, you must enter into a Qualified Exchange Accommodation Agreement (QEAA) with the EAT within 5 business days of the EAT acquiring title. Miss it and the safe harbor evaporates.

How Open1031 handles the window: The moment the EAT acquires title, a durable workflow starts a countdown. Neela drafts the QEAA agreement. You review and e-sign. The workflow confirms execution before the window closes — with escalating alerts at 3 days, 2 days, and 24 hours.
Honest safe-harbor boundary: The QEAA safe harbor under Rev. Proc. 2000-37 requires the combined holding period to be 180 days or less. Open1031 cannot extend this window. If you need additional time for an atypical situation, consult your tax attorney regarding alternatives before the clock starts.
The automated parking flow

Every step, run by a durable workflow

From EAT formation to title transfer, every step runs on a deterministic workflow engine that cannot miss a deadline or lose state.

1
EAT / SPE LLC formation
Your QI forms (or arranges) the single-purpose EAT (the Exchange Accommodation Titleholder) to hold title. The SPE LLC exists solely for your exchange — it holds nothing else, and it's formed before the property acquisition closes.
Automated · EAT entity formation
2
Property acquisition + QEAA execution (5-day window)
The EAT acquires the replacement property. Simultaneously, the 5-business-day QEAA countdown begins. Open1031's workflow drafts the QEAA agreement — Neela guides you through e-signature — and confirms execution before the window expires. Anchored to Rev. Proc. 2000-37.
5-day countdown · QEAA 5-day watcher
3
180-day parking clock starts
From the moment of EAT acquisition, the 180-day clock runs as a durable watcher. You receive status updates in the app and from Neela. The workflow escalates if the relinquished-property sale is at risk of exceeding the parking window.
24/7 durable · 180-day parking watcher
4
Relinquished property sale + escrow
You sell the relinquished property. Proceeds flow directly to segregated, bonded qualified escrow held by the QI of record — never to an Open1031 bank account, never to a commingled pool. No employee — at the QI or at Open1031 — can touch the funds without multi-party workflow approval.
Segregated escrow · escrow funds received
5
Exchange fund transfer (multi-party approval)
Exchange proceeds move from qualified escrow to the EAT as consideration for the replacement property. This movement requires multi-party approval — a requirement enforced at the workflow level, not just the UI level. The audit trail captures every state change.
Multi-party approval · EAT transfer-out
6
Title transfer to you + IRS Form 8824
The EAT transfers title of the replacement property to you. Open1031 generates IRS Form 8824 from the exchange record, pre-filled with all transaction data — you review, sign, and it's ready to file with your CPA.
Auto-generated Form 8824 · Form 8824 generation
Reverse exchange: manual-ops workflow vs. Open1031-powered

This is where most firms charge extra or say no.

Footnoted claims only. No fabricated metrics.

Fee structure

Manual-ops QI workflow

Reverse exchanges typically carry a premium surcharge — commonly $2,000–$5,000 above the standard forward-exchange fee — or a percentage of the transaction value. Reverse/improvement fees are rarely published; you discover the cost when you call.1

Open1031-powered

A flat, published platform fee — and firms on Open1031 can offer reverse at a flat client fee too. No percentage of sale proceeds, no escrow-float income. The price you see is the price.

EAT formation + QEAA execution

Manual-ops QI workflow

EAT formation is typically handled by a separate law firm the QI refers you to, adding attorney fees and coordination overhead. The 5-business-day QEAA window is tracked manually. Delays happen when a hand-off falls through the cracks.

Open1031-powered

EAT/SPE LLC formation is part of the workflow. The 5-day window starts a durable countdown the moment title transfers. Neela drafts the QEAA for e-signature. No hand-off to an external attorney required for the standard QEAA — you may still want one for complex situations.

Clock management + compliance

Manual-ops QI workflow

180-day parking limit is tracked on a spreadsheet or internal calendar. You're expected to call proactively. If the QI is unavailable during a holiday or staffing gap, you may not get the alert you need in time.

Open1031-powered

The 180-day watcher is a durable automated workflow. It cannot be paused by a holiday, a staffing gap, or a forgotten calendar entry. It escalates via push notification, email, and in-app alert at 30 days, 14 days, 7 days, and 48 hours before expiry.

Audit trail + IRS documentation

Manual-ops QI workflow

Documentation is paper or email-based. Pulling the full exchange record for an IRS inquiry means calling the QI and waiting. Form 8824 is your CPA's job from scratch.

Open1031-powered

Every state change in the exchange — from QEAA execution to title transfer — is written to an append-only audit log. Form 8824 is auto-generated from the exchange record. Your CPA gets a pre-filled, signed-off package.

1 Reverse exchange fee ranges are based on publicly available fee schedules and industry reporting from QI industry publications as of 2025. Open1031 cannot verify the current fee schedule of any specific competitor. Always confirm directly.

Where your money is

Your money never touches Open1031. Not once.

Exchange proceeds go directly from your closing to a segregated, bonded qualified escrow account held by the licensed QI of record — never to Open1031, never to a commingled pool. No single actor — at the QI or at Open1031 — can release funds without multi-party workflow approval.

$0
client funds in Open1031 custody — funds stay in QI escrow
24/7
durable workflow — clocks never sleep
100%
audit trail — every state change logged

Segregated qualified escrow

Your exchange funds are held by the QI of record in a dedicated, individually-titled escrow account — not a pooled fund. State-bonded QIs (CA SB 1007 and equivalents). Real-time balance visibility in the app.

Constructive-receipt firewall

No code path can move your funds without multi-party approval — enforced at the workflow level. The licensed QI holds your funds; no AI agent and no employee — at the QI or at Open1031 — can override this.

Neela's boundary

Neela guides, drafts, answers, and escalates. She never moves funds, never signs on your behalf, and never overrides the fiduciary. Her authority ends at the workflow approval boundary.

SOC 2 Type II (in progress) GLBA Safeguards Rule BSA / AML / OFAC screened eSign Act + UETA

SOC 2 Type II audit in progress — controls mapped; "SOC 2 certified" label will be applied only upon audit completion.

Ready to start?

Start your reverse 1031 exchange.

Open1031 automates the full QEAA parking structure — EAT formation, 5-day window, 180-day clock, fund release, and Form 8824 — with a complete audit trail, so your QI can offer reverse at a transparent flat fee.

Nothing on this page is tax or legal advice. Reverse exchanges run on Open1031 are designed to qualify for deferral under IRC §1031 when all Rev. Proc. 2000-37 QEAA requirements are met — this is not a guarantee of tax outcome. Consult your CPA and tax attorney before proceeding. Sample data (742 Evergreen Terrace, 456 Sunset Blvd, $850,000) is synthetic — synthetic. Demo exchanger: Matt Belcher (synthetic). Open1031 is not a Qualified Intermediary; it provides software to licensed QIs, who remain the fiduciary of record, and does not provide investment, tax, or legal advice.
Start a reverse exchange 5-day window automated · licensed QI of record
Begin