Selling With a 1031 Exchange Series · Part 2
How Does the 1031 Timeline Work?
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The most common reason a 1031 exchange fails is not that the property doesn’t qualify, but that the timing was miscalculated. The 45-day and 180-day deadlines are rigid: they do not move for weekends or holidays, and they generally cannot be extended.
Two Deadlines, Counted From the Same Day
Day 0 is the closing date of the sale of your old property (the “relinquished property”). If you sell more than one property in the exchange, the clock starts at the first closing.
Deadline one: the 45-day identification period
By midnight of the 45th day after Day 0, you must identify in writing the replacement property you intend to buy.
Deadline two: the 180-day exchange period
You must close on the replacement property by the earlier of:
- The 180th day after Day 0; or
- The due date (including extensions) of your federal income tax return for the year of the sale.
The two periods run at the same time: the 45 days fall within the 180 days. You do not get 180 days after the 45 days end.
Examples: Selling in Fall and Winter 2026
| Sale Closing Date | Day 45 (Identification Deadline) | Day 180 | Watch Out |
|---|---|---|---|
| October 15, 2026 | November 29, 2026 (a Sunday) | April 13, 2027 | Day 45 falls on a Sunday and does not roll forward |
| November 20, 2026 | January 4, 2027 | May 19, 2027 | The 2026 tax return is due April 15, 2027, before Day 180 |
The second example is a common trap. Unless you file an extension by April 15, 2027, your exchange period is cut off at April 15, and you could lose more than a month. If you sell late in the year, remember to extend your return rather than file on time.
What Counts as “Identification”?
- It must be in writing and signed by you;
- It must be delivered by midnight of Day 45 to the Qualified Intermediary (or another party to the exchange, such as the seller of the replacement property). Giving it only to your own attorney, broker or accountant is not enough;
- The description must be unambiguous: give the street address, and for a condo or co-op, the unit number;
- You may revise or revoke it in writing before Day 45. After Day 45, the list is locked;
- Property you actually acquire within the 45 days is treated as identified.
How Many Properties Can You Identify?
Choose one of three rules:
- The three-property rule: identify up to three properties of any value. This is the most common approach;
- The 200% rule: identify more than three, as long as their total fair market value does not exceed twice the value of the property sold;
- The 95% rule: identify any number and value, but you must acquire at least 95% of the total value identified. This is risky and rarely used.
New York Buyers: Leave Time for These Steps
In New York, 180 days can be tighter than it looks:
- Co-op board approval. New York City’s new law, effective July 28, 2026, sets 15 days to acknowledge and 45 days to decide, but with extensions and a possible July–August pause, the total can exceed two or three months, and the board can still say no;
- Condo right of first refusal. The building’s waiver usually takes some time;
- Financing. Loans on investment property are often underwritten more strictly than loans on a home;
- Title issues. A title defect on the replacement property can delay closing.
The 1031 Timeline at a Glance
| Stage | What to Do |
|---|---|
| Before signing the sale contract | Decide on a 1031; choose a Qualified Intermediary; add a 1031 cooperation clause to the contract |
| After signing, before closing | Sign the exchange agreement; assign the sale contract rights to the intermediary and notify the buyer |
| Day 0 | Close the sale; proceeds go directly to the intermediary |
| Days 1–45 | Search, negotiate and identify replacement property in writing |
| Days 46–180 | Sign the purchase contract, obtain financing and board approval, and close |
| Day 180 or the tax return due date, whichever is earlier | All purchases must be complete |
| The following tax season | File Form 8824 with your income tax return |
Can the Deadlines Be Extended?
As a rule, no. Only in rare cases, such as federally declared disasters, does the IRS issue relief extending the deadlines. Don’t count on an exception.
Attorney’s Insight
The real starting point of a 1031 timeline is not the sale closing but the listing. Our advice:
- Start looking for replacement property before you sell. Ideally, by the time your sale closes, you already have one or two clear targets, or are already negotiating;
- Use the three-property rule to name backups. If your first choice falls through because of financing, the board or title, a backup can save the whole exchange;
- Think twice about a co-op as replacement property. Board timing is uncertain, the board can reject you, and it may restrict renting. When time is tight, a condo or fee simple property is usually safer;
- Put every key date on the calendar, and have your attorney and intermediary double-check them. In a 1031 exchange, missing by a day has the same result as missing by a month.
Attorney’s perspective
Before closing, we map out your 45-day and 180-day calendar and flag the tax-filing deadline trap, so that both the identification and the purchase happen on time.
For advice about your own situation, call +1 718-218-5805 or schedule a consultation. We meet clients in Flushing and Manhattan, in English or Chinese.
This article is for general information only and is not legal advice. Reading it does not create an attorney-client relationship. For advice about your situation, please contact us.
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