1031 Exchange Deadlines: Staying on Track to Avoid Penalties

Timing is everything in a 1031 exchange. Missing deadlines can result in losing your tax deferral benefits. Here’s what you need to know about staying on schedule.

Key Deadlines

1. 45-Day Identification Period:

   • You must identify potential replacement properties within 45 days of selling your property.

   • Identification must be in writing and delivered to a Qualified Intermediary.

2. 180-Day Exchange Period:

   • You must close on the replacement property within 180 days of selling your relinquished property.
     

Sarah sold her retail space and identified three potential replacement properties within the 45-day period. However, she missed the 180-day deadline due to financing delays, losing her tax deferral eligibility.

Tips for Staying on Track

• Start early: Begin searching for replacement properties before selling.

• Work with experienced professionals: A Qualified Intermediary and tax advisor can ensure you meet deadlines.

• Monitor your timeline: Keep a detailed calendar of key dates.
  

How Arc&Ledger Can Help We ensure your exchange stays on track, protecting your tax deferral benefits. Contact us for expert guidance.