A question we often receive from real estate investors is, “how long do I have to complete a 1031 Exchange after the sale of a property?”
The answer to this question is actually quite simple: from the time you close on the property that you are selling, you have 180 days to purchase your replacement property or properties.
Within the first 45 days of the 180, you are also required to “identify” the next property that you are going to buy. A lot of investors get hung up on this part, believing it's a complicated process or that they have to be under contract within 45 days.
The good news is that “identifying a property” is just a matter of filling out a simple form where you put in the address or legal description of the property you are considering. We also advise listing back-up properties on the form in the event something falls through with your first choice.
How Is the Time Counted?
The clock starts the day after closing on your property. It's also important to note that the 180-day deadline is firm and cannot be changed or extended for any reason.
Weekends and holidays also count in the timeline. So, if your 180-day deadline would fall on Christmas, for example, and you know the title company will be closed, you'll need to move up your closing date sooner. The only time we've seen accommodations in this area is when a community has experienced a natural disaster. Other than that, you must be prepared to close within the 180 days or you will miss your opportunity to utilize a 1031 Exchange.
Have More Questions?
If you'd like more information about 1031 Exchanges, check out our educational videos on YouTube. Or, you can contact us directly to schedule an appointment. We'd be happy to answer your questions and serve as your intermediary on your upcoming transaction. For assistance getting started, call (888) 508-1901