1. What is a 1031 Exchange?

A 1031 exchange (also called a like-kind exchange) is a swap of one investment property for another that allows capital gains taxes to be deferred under Section 1031 of the U.S. Internal Revenue Code.

2. The 45-Day Identification Rule

The IRS requires that within 45 days of selling the relinquished property, the investor must identify potential replacement properties in writing to a qualified intermediary.

Key points:

• The 45-day period includes weekends and holidays
• The count starts the day after the sale closes
• Identification must be in writing and signed
• Must be delivered to the qualified intermediary

3. Importance of the Deadline

Details: Missing the 45-day deadline disqualifies the entire exchange, making all capital gains immediately taxable. The IRS does not grant extensions for this deadline.

4. Using the Calculator

Tips: Enter the exact date your property sale closed. The calculator will show the last day to identify replacement properties.

5. Frequently Asked Questions (FAQ)

Q1: What if the 45th day falls on a weekend or holiday?
A: The deadline is not extended - it remains the actual 45th calendar day after closing.

Q2: How many properties can I identify?
A: You can identify up to 3 properties without value limits, or more properties if they meet the 200% or 95% rules.

Q3: Can I change my identified properties?
A: You can revoke and replace identifications anytime before the 45-day deadline, but not after.

Q4: What happens if I identify properties but don't close on any?
A: The exchange fails and taxes become due unless you properly identified properties and made reasonable efforts to acquire them.

Q5: Are there other deadlines in a 1031 exchange?
A: Yes, you must close on a replacement property within 180 days of selling the relinquished property.