Can I Modify my Identified Property after Day 45?

Sometimes people want to know if their replacement property identification can be modified after the 45th day but before they received the replacement property.

Changing Your Identification

The answer to the question is if you want to change your ID after midnight of the 45th day you are SOL that is Statutorily Out of Luck because the code and the regulations don't permit you to change your identification after the 45th day. However, before the 45th day if you want to remove your identification, or amended, or completely replace it you can do that right up until midnight of the 45th day by sending a new identification or a new written revocation that's signed by the taxpayer and sent by midnight of the 45th day.

• Start Your 1031 Exchange: If you have questions about 1031 timelines, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

© 2016 Copyright Jeffrey R. Peterson All Rights Reserved

Whiteboard Video - 1031 Exchange Deadlines

In this whiteboard animation video, we walk you through the deadlines that you need to be aware of in a 1031 exchange; specifically, the 45 day identification period, and the 180 exchange period.

• Start Your 1031 Exchange: If you have questions about 1031 deadlines, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

© 2016 Copyright Jeffrey R. Peterson All Rights Reserved

1031 Exchange Timeline

Let’s talk about the timeline for a typical 1031 exchange. For simplicity, we have broken the timeline down into a handful of stages.

Sale of Your Relinquished Property

The first stage of the transaction is the sale and marketing of your old relinquished property.

Closing

Once you have found a buyer, a closing occurs. This closing is day zero in your 1031 exchange. We draw a line out from that date to 180 days thereafter. That is the total timeframe that is available to you to complete your 1031 exchange.

45 Day Identification Period

But within that timeframe the first 45 days are called the identification period. In the 45 day period, you have to make a written designation or identification of your replacement property. Any properties that you purchase during that first 45 days are deemed to be identified because you closed on them, you own them.

However, any properties that you are going to buy in the remaining 135 days will not be considered like kind unless they were designated and identified during the first 45 days.

Most taxpayers work really hard to sell their relinquished property, then they work really hard during the 45 day period to designate their three best guesses, crossing their fingers that they’ll be able to close on one or more of those properties in the remaining 135 days.

All of this is stressful. But knowing the deadlines in advance allows you to work ahead on these benchmarks. Wouldn’t it be nice if you entered the identification period with a replacement property in your sights or locked up with a purchase agreement? These deadlines are strictly enforced, so thinking ahead like a chess player will help you navigate the 1031 process with as little stress as possible.

• Start Your Exchange: If you have questions about the 1031 exchange timeline, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

© 2016 Copyright Jeffrey R. Peterson All Rights Reserved