The starker exchange is an exchange where the proceeds from the sale of real estate stay, in theory, on the Intermediary’s table until the Seller finds suitable property for the exchange. It is like the exchange is held “in suspension” by the Intermediary. No money or deeds actually change hands between the Buyer and Seller in the initial stage of the starker exchange.
Under the “Starker” ruling, you may have theoretically sold your farm, but you cannot be taxed on your “theoretical” profits if you identify a replacement property within 45 days and if you fail to complete the starker exchange within 180 days.