How to Stay on Track in Your 1031 Exchange

Timing Is Everything: Understanding the 45- and 180-Day Rules in a 1031 Exchange

A 1031 exchange can be a powerful tool for deferring capital gains taxes, but success depends heavily on meeting strict IRS deadlines. Two key rules every investor must understand are the 45-day identification rule and the 180-day closing rule.

The 45-Day Identification Rule
From the day you sell your relinquished property, you have 45 days to identify potential replacement properties in writing. Missing this window means your exchange will not qualify—so planning ahead is critical.

The 180-Day Closing Rule
In addition to identifying properties within 45 days, you must complete the purchase of one or more of those identified properties within 180 days of your sale. These timelines run simultaneously, which means you don’t get extra time after the 45-day period.

Why These Deadlines Matter
Failing to meet either deadline can disqualify the exchange and trigger capital gains taxes. That’s why working with a knowledgeable Qualified Intermediary (QI) is essential—they help you stay on track and avoid costly mistakes.

By staying mindful of the 45- and 180-day rules, you can maximize the benefits of your 1031 exchange and keep your wealth working for you.

Ready to start your 1031 exchange? Contact us today and let’s make your next move tax-smart!