What are the time restrictions for a 1031 Exchange?

Careful adherence to the requirements of Section 1031 exchange properties is important in maintaining the tax-deferred status of the transaction.

The investor has a total of 180 calendar days from the closing of the initial sale to complete the exchange.

Identification Period: Within the first 45 days of the property being relinquished, the investor MUST file a list of possible replacement properties with a qualified intermediary - a firm certified to act as the closing agent for 1031 property exchanges. An investor may choose up to three properties regardless of value or a group of properties with a combined value that does not exceed 200 percent of the value of the initial property sale.

Exchange Period:  An Investor has 180 days to complete their exchange after the closing of the initial sale, or the due date of their tax return for the year in which they relinquish their property (unless an extension is filed), whichever occurs first.

 Note: The 45 days are INCLUDED in the 180 day timeline. You DO NOT have 45 days plus 180.  In the case that either deadline is missed, the IRS will bill you for capital gains.