Deadlines & Implications of a Failed 1031 Exchange

1031 identification by mail

In a 1031 exchange there are some pretty brutal and harsh deadlines that you have to meet in order to have a successful exchange. Here are some tips for meeting those deadlines.

Identify by Day 45

You have to identify your replacement property by midnight of the 45th day. If you miss that deadline you are SOL (Statutorily Out of Luck) because the statute says you have to have sent your identification in before midnight of the 45th day.

Fax, Email, Snail Mail

Sometimes taxpayers doing exchanges will fax, e-mail, or FedEx identification to their intermediary so that they have some recorded documentation that it was sent within the proper time frame. If you go to the mailbox and drop your identification in a stamped addressed envelope to the intermediary on the last day of the exchange you may have sent it but you may not have any proof that it was sent, especially if the postal employee doesn't pick up the mail from the mailbox and the letter isn't actually postmarked until a day or two later when it is processed at the mail sorting service.

To be on the safe side, send the identification by fax and email, and if you want to you can also mail it and try to get the letter postmarked by going directly into a postal office and handing the letter to the postal employee before midnight of the 45th day.

  • 1031 Hotline: If you have questions about the deadlines and implications of a failed 1031 exchange, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.


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