There are many rules that you have to abide by when exchanging property in a 1031 transaction. In this article, we are going to talk about the deadlines that govern 1031 exchanges of real property.
1031 Exchange Deadlines
With any 1031 exchange of real estate, there are two deadlines in particular that you need to pay attention to. Your overall deadline to complete your exchange is 180 days, beginning when you sell your relinquished property. You have the first 45 days of that period to identify your replacement property in writing.
Exceptions to the Rule
There are a few exceptions to these timing rules. The biggest exception comes when your federal tax filing deadline falls within your 1031 exchange window. In this situation, you have until your tax filing deadline (April 15 for individuals, March 15 for businesses) to complete your exchange – rather than the full 180 days. This is because the IRS wants both your replacement property and your relinquished property reported on the same tax return. This is a common trap that many aren’t aware of, and it can potentially derail your exchange so you need to be cognizant of this rule. If you have timing issues, you can always file for an extension to give yourself a little more breathing room.
Qualified Intermediaries in Minnesota
1031 exchanges are a great tool that allows you to defer your capital gains tax when selling real estate. At CPEC1031, we help clients facilitate 1031 exchanges of real estate. Our qualified intermediaries can walk you through each step of your exchange – preparing your documents and answering all of your questions along the way. Contact us today at our downtown Minneapolis office to chat with a Minnesota qualified intermediary about your 1031 situation.
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
Defer the tax. Maximize your gain.
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