WHAT IF YOU CAN’T FIND A REPLACEMENT PROPERTY IN TIME FOR YOUR 1031 EXCHANGE?
The 1031 exchange is one of the most powerful wealth-building tools in real estate. It allows investors to sell a property, defer capital gains taxes, and roll every dollar of equity into a new, like-kind asset. Simple enough on paper. But in practice, the timeline can be brutal. Two Non-Negotiable Deadlines in a 1031 Exchange Under Section 1031 of the Internal Revenue Code Miss either of these deadlines, and the IRS treats the exchange as failed, and your deferred capital gains come due immediately.
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The 45-Day Identification Period
The 180-day exchange period
The 45-day identification period, which begins the day you close on the sale of your relinquished property. From that moment, you have exactly 45 calendar days, including weekends and holidays, to formally identify your potential replacement property in writing.
The 180-day exchange period, which runs concurrently with the 45-day window and gives you a hard stop at 180 calendar days from the sale to close on your replacement property.
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