A lot of taxpayers conducting like-kind exchanges wonder how to report a 1031 exchange to the IRS. Another common tax-related question we get is “how is my exchange taxed if it straddles two years?” In this article, we are going to dive into that topic and talk about how to handle a 1031 exchange that crosses over into a new year.
Like-Kind Exchange Periods
The standard time period for a like-kind exchange is 180 days. That means you need to sell your relinquished property and acquire your replacement property within 180 days or your exchange will fail. However, there are a few rare exceptions to that rule. For example, if your federal tax filing deadline lands within your 180 day exchange period, the filing deadline is your new 1031 exchange deadline. This is because the IRS wants to see your relinquished property and your replacement property reported on the same tax return.
As always, preparation is the key ingredient here. If you begin planning your 1031 exchange early, and involve a qualified intermediary, you will have all of your bases covered and you won’t be scrambling at the last minute. You should also involve your CPA in the process to make sure things go smoothly.
1031 Exchange Tax Help
If you’re confused about how to report your 1031 exchange on your upcoming tax return, reach out to a qualified intermediary for help. At CPEC1031, LLC, our intermediaries have more than two decades of experience working on like-kind exchanges of all shapes and sizes. We can put that experience to work for you! Our intermediaries can help navigate you through the 1031 exchange process, making sure you meet all the deadlines and requirements along the way. Contact us today to learn more about our 1031 exchange services.
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
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