When it comes to a 1031 the IRS has a specific and rigid timeline laid out for your exchange. From the day that you close the sale of your investment property, it is important to know that there are two periods for you to honor — the identification period and the exchange period. From the day you close the sale of your old property you have 45 calendar days to produce a list of potential replacement properties. Forty-five calendar days is all you have — weekends and holidays count. During that period of time, you must either identify potential replacement properties or take the title of a new property and finish the process. At the very least you need a clear and easy to understand list that shows the properties you are considering purchasing. It’s important to remember that on day 46 your 45 day list cannot be changed. You are stuck with what is on that list for the remainder of the exchange period.
Alongside the 45 day period is the total exchange period of 180 days. From the day that you close the sale of your property, you have 180 days to complete the process. The replacement property that you purchase has to be on or more of the properties that are on your 45 day list. The 180 day exchange calendar does have one little caveat that you need to pay attention to; it’s actually not always 180 days. The statute reads that “You have 180 days or until the date of your next required tax filing.” If you find your tax filing date rapidly approaching, filling for an extension with IRS will get you back on track. The 45 day list can be daunting and along with it there are some additional identification requirements that can complicate it, so make sure you are working with a good QI.