The delayed 1031 exchange is one of the most popular types of like-kind exchanges. As with any type of real estate exchange, you have to be aware of the deadlines and regulations required. In this article, we are going to discuss some of the deadlines you need to hit in order to execute a successful delayed exchange of 1031 property.
Delayed 1031 Exchange
A delayed 1031 exchange is perhaps the most common type of real estate exchange. It occurs when a taxpayer sells their relinquished property on one date, and then exchanges into their replacement property on another date.
45 Day / 180 Day Deadlines
In a delayed 1031 exchange (or any like-kind exchange, for that matter), there are certain time limits you need to abide by in order to complete a successful exchange. The most important time limit to remember is 180 days. After selling your relinquished property, you have 180 days total to complete your 1031 exchange. If your exchange goes beyond the 180th day, it will fail.
Furthermore, you have the first 45 of those 180 days to identify your replacement property or properties in writing.
1031 Qualified Intermediaries
If you are considering a delayed exchange, it is absolutely essential that you are aware of the deadlines and other requirements set out in the Internal Revenue Code. This is where a qualified intermediary can be extremely helpful. There are many benefits to hiring a qualified intermediary at the outset of your 1031 exchange. An intermediary acts as an advisor and a facilitator throughout your exchange, and can insulate you from receiving any of the net proceeds from the sale of your relinquished property. Contact us today at our downtown Minneapolis office to discuss the ins and outs of your 1031 exchange.
- 1031 Hotline: If you have questions about delayed 1031 exchanges, feel free to call me at 612-643-1031.
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