When Do I get my Funds Back after a 1031 Exchange?

1031 exchange funds

If I don't spend all of the 1031 exchange funds, how long do I have to wait to get back my money? That's the topic for this article.

1031 Exchange Timelines

The essential question is this: when is your exchange ending? If you don't identify any replacement properties within the first 45 days (ending at midnight of the 45th day), the exchange is over and any unused exchange funds could then be returned to you the next day (really the next business day).

However, if you did identify replacement property your exchange will continue after the 45th day and you won't be able to get your unused exchange funds until you buy and receive those identified replacement properties, which would then end your exchange. If there are no more properties on the chopping block to acquire then the exchange is done.

Worst Case Scenario

The worst case scenario is that your 1031 funds are locked-up in the 1031 escrow account for the maximum exchange period of 180 days.  After 180 days the exchange period is over and you can receive back the unused exchange funds. However, any funds that you get back may be subject to taxes.

If you need to find a way to rescue a failed 1031 exchange from taxes, check out: http://www.cpec1031.com/blog/a-rescue-option-for-a-failing-1031-exchange.

  • 1031 Hotline: If you have questions about 1031 exchange funds, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.

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