Property Identification and Closing Deadlines
With any 1031 Exchange, there are two VERY important time deadlines of which you should be aware:
The First Deadline - You only have 45 days from the time of the close of escrow on your relinquished (sold) property to designate and identify your replacement property(ies).
There are actually three different ways you can accomplish this, but the big deal here is that the 45-day ID period is set in stone and includes weekends and holidays. Therefore, 45 days means only 45 days! If you don’t identify Like-Kind property[ies] within that time period, a taxable event will take place, and a very unhappy camper you will be.
The Second Deadline - You must complete the purchase of one or more properties no later than 180 days from the sales closing of your relinquished property, OR by the date (including extensions) of your Federal Income Tax return [for the year in which your relinquished property was sold].
As you can clearly see, these two rules are very specific, with virtually no leeway. If you are considering a 1031 Tax Deferred Like-Kind Real Estate Exchange, call us to explore how we can help you navigate a successful 1031 Exchange.
Could a 1031 DST Exchange make sense with your specific circumstances? Deferring taxes on highly-appreciated investment property can be a long-term wealth builder. If you have any questions about 1031 Exchanges or want info on our current 1031 DST offerings, please contact me, Dave Pimper, at 1-800-727-1031 or at www.1031propertyxchange.com.