Can I Change the Property that I have Identified in My 1031 Exchange

The 1031 exchange requires that you sell an exchange property (relinquished property) and acquire other property (replacement property in order to defer the payment of your capital gain taxes.

Replacement Property Identification
The 1031 exchange process requires that you identify the replacement property or properties that yu are going to acquire as your replacement property within your 1031 exchange. The identification must be made within 45 days from the date that you sold and closed on the sale of your exchange or relinquished property.

Changing Identified Property
The question that comes up all the time is can I change the replacement properties that I have already identified as part of my 1031 exchange. The answer is: It depends.

You can change your mind and revoke your identified properties at any time as long as you are still within your 45 calendar day identification period. Simply contact your 1031 exchange Qualified Intermediary and find out how they want you to revoke the identification that you already provided them with. I would recommend that you make a complete revocation of your previous identification even if you do not want to revoke all of the properties and then make a completely new identification on a separate identication form. This keeps the entire process nice and clean.

However, you can not change your mind and revoke your replacement property identification if you are outside of your 45 day identification period. You can only change your mind during the 45 day ID period, but not after the 45 ID period has past.

Beware of Changing Your Mind After the 45 Day Period
There are those 1031 exchange Qualified Intermediaries that allow you to amend, alter or change your identification period after the 45 day period. I get the comment all the time: It doesn't matter; THEY let me do it. Actually, they are allowing YOU to commit TAX FRAUD. I know that it is tempting, but it is tax fraud none the less.

How Can I Get An Extension For My 45 Day ID Period?

I hear this question virtually each and everyday. It's usually in a state of panic because the 1031 exchange investor is running out of time to identify his or her replacement property.

The 45 calendar day deadline to identify replacement property is a very short period of time and can be difficult, so 1031 exchange clients should start looking for replacement properties as soon as they know they are going to sell and structure a 1031 exchange.

Tax Deferred Exchange Due Dates Are Law; Not Regulations

Unfortunately, there is no way to get an extention of time for your 1031 exchange deadlines or due dates, unless you or the subject property is affected by a natural disaster such as a fire, flood, hurricane, etc.

The 1031 exchange deadlines or due dates are actually part of the tax code (laws) and are not part of the IRS Regulations (i.e. Section 1031 of the Internal Revenue Code), and can not be extended without an act of Congress. The IRS does not even have the ability to grant an extension, alter or postpone the 45 or 180 calendar day deadlines.