A 1031 Starker Exchange is just another word for a Reverse 1031 Tax Exchange.  A 1031 Starker Exchange allows an owner of investment property to postpone the payment of capital gains taxes and depreciation recapture taxes on the sale of their property. They are allowed to defer these tax payments only if they reinvest the proceeds from the sale into another like kind property.

A Starker Exchange is a 1031 tax exchange in which the taxpayer purchases their replacement property before they sell their old property. This is the most commonly used type of 1031 Tax Exchange and is specifically allowed by the IRS through a statutory amendment (Tax Reform Act of 1984). These exchanges are known as "Starker" exchanges because of the name of the litigant in the case that determined the law.

In order for a taxpayer to completely defer the payment of taxes in a 1031 Starker Exchange the taxpayer must not receive, or realize, any of the sales proceeds. This is typically done through what is called a qualified intermediary.

In a traditional 1031 Tax Exchange, the qualified intermediary holds the proceeds from sale in a separate account on behalf of the exchanger until the replacement property transaction closes. The purpose of this is to insure the IRS that the taxpayer does not receive or realize any gain from sale, and that the transaction is indeed an exchange. In a 1031 Starker Exchange, the qualified intermediary takes title to the new property for a temporary period of time until the taxpayer closes sale on their old property.