What is it called when an investor sells a different property than originally marked for an exchange?

The scenario described involves an investor selling a different property than originally intended for an exchange, which is classified as a reverse tax-deferred exchange. In a reverse exchange, the investor first acquires a replacement property before selling the relinquished property, allowing for a more strategic approach to property investment. This method provides flexibility and potentially advantageous terms for the investor, as they can secure the desired property before engaging in the sale of their existing property.

In a reverse exchange, it is important to note that the Internal Revenue Code allows deferral of capital gains taxes under specific circumstances, provided that certain criteria and timelines are met. This makes it a valuable strategy for investors looking to optimize their portfolio without incurring immediate tax liabilities.

The other options represent different scenarios or strategies in the realm of real estate exchanges but do not pertain to selling a different property than the one originally intended. For instance, standard tax exchanges focus on a direct exchange between properties, delayed cash exchanges involve a cash sale after a time delay, and forward exchanges typically refer to the sale of relinquished property before purchasing a replacement. Each of these options ensures compliance with tax regulations but does not encompass the specific action of selling a different property, which is why they are not applicable in this situation.