TIMELINE
You have 45 days starting the day after you close on the sale of your relinquished property to identify its replacement. If you don’t notify the intermediary of the replacement within this time, the 1031 exchange will fail and you will immediately trigger the transfer of your assets into your name and you will be responsible for any taxes that result from the sale. Further, you have 180 days starting the day after your closing on the relinquished property to close on its replacement.
You can identify more than one replacement property. Certain rules apply if you identify more than three, so be sure to consult with your intermediary if you are considering identifying four or more properties.
The exchange has to take place within a single tax year. You may be able to play some games with filing dates to make that work, so consult with your tax accountant if you are at risk.
Next week: part 4 of 4 – Ins and outs of 1031: Types of Exchanges
Tags: 1031 Exchange, Land sales