Deadlines

By using a Qualified Intermediary, a 1031 exchange does not have to be simultaneous: an Exchanger can acquire a replacement property days or even months after they convey the relinquished property. However, there are important deadlines:

Identification of Replacement Property

The Exchanger must identify the replacement property within 45 calendar days from the transfer of the Relinquished Property, including weekends and holidays. The identification must be in writing, signed by the taxpayer, and sent to either the Qualified Intermediary, the seller of the replacement property, or any other person involved in the exchange, other than the Exchanger or a disqualified person.

KV 1031 simplifies the identification by providing you with a form to complete, and a detailed description of the rules.

The Exchanger may identify multiple properties, however, there are limits as to the number of potential properties that can be identified. The Exchanger may identify:

3 Property Rule:

A maximum of three replacement properties, regardless of fair market value of the properties.

200% Rule:

Any number of replacement properties, provided the aggregate fair market value of all of the properties together does not exceed 200% of the fair market value of all of the relinquished properties.

95% Rule:

Any number of replacement properties, regardless of the fair market value, provided that before the end of the Exchange Period, the Exchanger acquires identified replacement property with a fair market value of at least 95% of the aggregate fair market value of all identified replacement properties.

Exchange Period

In addition to identifying the replacement properties in a timely manner, the Exchanger must also acquire the replacement properties by the earlier of 180 days after the conveyance of the relinquished property, or the Exchanger’s tax filing due date, including extensions.