A three-party exchange is used to remedy a situation in which one party wants a nontaxable exchange while the other party wishes to sell property.

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In a three-party exchange, a third party acts as an intermediary to facilitate a nontaxable exchange between two other parties, one of whom wishes to sell property. This allows both parties to achieve their desired outcome without triggering tax liability.

A Three-Party Exchange Is Used to Remedy a Situation in Which