1031 Exchange Due Dates: Special Considerations at Year-End

1031 Exchange Deadlines and Due Dates

The successful completion of your 1031 Exchange transaction requires you to comply with certain 1031 Exchange deadlines and due dates. The 1031 Exchange deadlines consist of the 45 calendar day identification deadline and the 180 calendar day (or less) 1031 Exchange period.

These 1031 Exchange deadlines and due dates can not be extended under any circumstances, unless the President of the United States declares a natural disaster area that affects the properties or parties involved with the 1031 exchange transaction. So, it is important that you are aware of the 1031 Exchange due dates required to successfully complete your 1031 Exchange transaction.

Year-End 1031 Exchange and Income Tax Planning

Year-end is rapidly approaching and there is a little known 1031 Exchange deadline that you may not be aware of when completing a 1031 exchange, which I eluded to above when I referenced the "or less" provision. This exception to the 1031 Exchange deadlines only applies to you if you sell and close on your relinquished property (sale) transaction between October 17th and December 31st of any given income tax year.

You must complete your 1031 Exchange transaction, which includes the conveyance (receipt) of legal title to all of your like-kind replacement properties that you intend to acquire, no later than the earlier of:

(1) midnight of the 180th calendar day following the close of the relinquished property (sale) transaction, or

(2) the due date of your Federal income tax return for the tax year in which the relinquished property was sold, including any extensions of time to file.

You do not need to be concerned about part (2) above unless the first relinquished property transaction sold and closed on or after October 17th and on or before December 31st of any given tax year, which would mean that the 180th calendar day would fall after April 15.

You can easily work around this requirement by filing an extension of time to file your income tax returns, then completing your 1031 exchange transaction, and then filing your income tax returns. It is important that you do not file your income tax return prior to completing your 1031 exchange.

You can learn more about this requirement at: http://www.exeterco.com/1031_exchange_deadlines.aspx