Seven Facts to Remember the 45-Day and 180-Day Deadline

There are two standard 1031 exchange deadlines that must be met. The first is the 45-day deadline where the exchanger, the individual doing the exchange, identifies properties they would like to purchase. This is referred to as the identification period.

The second deadline is the 180-day deadline when the exchange must be completed. The exchanger must close on at least one of the properties identified during the 45-day identification period by the 180th day to complete a successful exchange. The timeline for this deadline begins at closing on the property that was initially owned and is being sold. Let’s discuss these timelines in more detail.

Standard 1031 Exchange: 45-Day Deadline

The exchanger has 45 Days from the day they close on their sale to identify up to three properties they would want to purchase within their 1031 Exchange.  If the exchanger would like to identify more than 3 properties, there is a 200% rule that takes into effect.

A member of the team will send the exchanger the “Replacement Property Identification Form” once the property has closed and we have received the exchange proceeds.

This form asks for the property(ies) address, city, state, and estimated purchase price. The exchanger can change their identifications as often as they would like up to midnight EST on the 45th day.

It is important to note that no extensions or changes are allowed to the 45-day identification form after the 45th day has passed.

Standard 1031 Exchange: 180-Day Deadline

The taxpayer will have 180 days from closing on the property they are selling to close on the property(ies) they will be purchasing. The property(ies) should be those identified during the 45-day identification period.

When you go under contract or wish to make an identification, it is best to notify us immediately so we can send you the proper documentation.

Seven Facts to Remember to Meet Your Deadlines

1. 1. For a standard exchange, you can go under contract for a property you plan on purchasing before you close on the property you are selling as long as the property you are selling closes first.
      
      
   2. The property you are selling must be equal to or lesser than the cost of the property you are buying. This can also be met by selling one property and buying multiple.
      
      
   3. If you approach the 45th day and decide that you want to discontinue the 1031 exchange, you can revoke your identifications, and we can return the exchange proceeds to you on Day 46.
      
      
   4. If you have already made identifications and it is past your 45-day identification period, we have to hold the exchange proceeds until the exchange period is over. As the Qualified Intermediary, we cannot release the funds back early even if the exchanger has decided that they will not be purchasing one of the properties that they identified in their identification period.
      
      
   5. Both the 45-day and 180-day deadlines begin when you close on the property you are selling.
      
      
   6. No extensions or changes are allowed to the 45-day identification form after the 45th day.
      
      
   7. There are no extensions to the 180-day deadline. If the property you wish to buy falls outside of the 180-day deadline, we will not be able to fund the purchase and we will return the exchange proceeds to you on day 181.

Getting Started

A 1031 Exchange is only used for investment, rental, and income-producing properties. If you are under contract or considering selling your investment, business, or rental property, give us a call at (239)-333-1031.

Important Note: You must set up your 1031 Exchange prior to closing on the sale of your investment, rental, or income-producing property. It is important to note that the following are deadlines that the taxpayer, or exchanger, will need to know for their 1031 Exchange. Please visit our website or call (239)-333-1031 to see if your investment, business, or rental property qualifies today.

MIDLAND TRUST COMPANY, OR ITS AFFILIATES OR SUBSIDIARIES (COLLECTIVELY REFERRED TO AS “MIDLAND”), IS NOT A FIDUCIARY: Midland’s role as the Custodian and/or Administrator of self-directed retirement accounts is non-discretionary and/or administrative in nature. The account holder or his/her authorized representative must direct all investment transactions and choose the investment(s) for the account and is responsible for conducting his/her own due diligence. Midland has no responsibility or involvement in selecting or evaluating any investment and does not conduct any due diligence on any investment. Nothing contained herein shall be construed as investment, legal, tax, or financial advice or as a guarantee, endorsement, or certification of any investments.