The 1031 calendar: what happens on day 0, 45 and 180

Before day 0: the decisions that cannot be made later

The exchange is won or lost before the relinquished property closes. Three things have to be true on the closing date, and none of them can be fixed afterward.

A qualified intermediary is engaged. The sale proceeds must go from the closing to the intermediary under a written exchange agreement that limits your rights to the money. If the proceeds reach you, or someone who is your agent, you have received them, and there is no exchange. Under Treasury Regulation §1.1031(k)-1(k), your real estate agent or broker within the prior two years is a “disqualified person” for the role, as are your attorney, accountant and employees. We cannot serve as your intermediary, and we do not hold exchange funds.

The closing date is one you can plan around. Both periods are counted from the day of transfer, so the closing date sets the whole calendar. A closing that slips by two weeks moves day 45 and day 180 by two weeks; one that is pulled forward shortens the time you have to find replacement property.

The replacement search has started. Forty-five days is not long to find, underwrite and identify income property with clean title and a tenant that pays. The exchanges that close on time are the ones where the search began while the relinquished property was still under contract.

Day 0: the relinquished property transfers

The day title to the relinquished property transfers is day 0. From that day, two periods run concurrently: 45 days to identify replacement property and 180 days to receive it. They are counted in calendar days, so a deadline that falls on a Saturday, a Sunday or a holiday is still the deadline.

Suppose the relinquished property closes on Tuesday, November 10, 2026. Day 45 is Friday, December 25, 2026, and day 180 is Sunday, May 9, 2027. The identification is due on Christmas Day, and the last day to close on the replacement property is a Sunday, when no title company is open. In practice the identification goes out the week before and the replacement closing is scheduled for the preceding Friday at the latest. Our deadline calculator computes both dates from any closing date and flags the weekends.

One thing owners sometimes miss: if the relinquished property is sold under a builder’s takedown contract, with lots closing in phases, each phase is its own transfer with its own day 0, day 45 and day 180. An exchange planned around the first closing alone will not fit the second.

Days 1 to 45: identification

Identification is a document, not a conversation. It must be in writing, signed by you, and delivered before midnight of day 45 to the person obligated to transfer the replacement property or to another party to the exchange who is not disqualified; in practice, the intermediary. Each property must be “unambiguously described”: a street address, a legal description or a distinguishable name. “A net-lease building in Port Orange” is not an identification.

How many properties you may list is governed by three rules in Treasury Regulation §1.1031(k)-1(c)(4). Under the three-property rule, you may identify up to three properties regardless of value. Under the 200-percent rule, you may identify any number of properties as long as their combined fair market value is no more than twice the value of what you sold. If you exceed both limits, the 95-percent exception saves the exchange only if you actually acquire at least 95 percent of the total value of everything you identified. Most exchanges use the first rule and carry a backup in the second or third slot.

Until midnight of day 45 you may revoke an identification and substitute another, in writing, in the same way. After that the list is fixed, and the replacement property must come from it. An early identification is therefore a placeholder that can be improved on until the deadline, and it is far better than an empty page on day 44.

Two notes for land sellers. Vacant land held for investment and an income-producing building are like-kind to each other, so an owner who sells acreage can identify net-lease retail, small-bay industrial, self-storage or multifamily as replacement property. But land that was subdivided and held primarily for sale may be dealer property, which is excluded from §1031 altogether; that is a question for your CPA, and it should be asked before the sale contract is signed.

Days 46 to 180: receiving the replacement property

The second deadline is about title. The replacement property must be received, meaning title transfers to you, by the earlier of two dates: day 180, or the due date of your federal income tax return for the year in which the relinquished property transferred, including extensions. For a sale late in the year, the return due date can come before day 180. Filing an extension generally restores the full period, but that decision is your CPA’s, and it has to be made before the return is due.

Everything a purchase normally involves has to fit inside this window: the inspection period, the survey and title commitment, the environmental report, the lender’s underwriting and appraisal, and the closing itself. A contract whose diligence period runs past day 180 is a contract you cannot perform as an exchange, which is why the closing calendar belongs in the first draft of the offer, not the last.

If you close on replacement property worth less than what you sold, or take cash out at closing, the difference is “boot,” and it is taxable up to the amount of your gain. The exchange still works, but only part of the gain is deferred. Deferred is the operative word throughout: your basis carries over into the replacement property, and the gain is deferred, not eliminated.

After day 180: reporting and the two-year rule

The exchange is reported on IRS Form 8824 with your return for the year the relinquished property transferred. If the replacement property was acquired from a related party, or the relinquished property was sold to one, the deferral can be undone if either party disposes of the exchanged property within two years after the last transfer, with narrow exceptions. Keep the closing statements, the exchange agreement, the identification notice and the intermediary’s records together.

Finally, the question every exchanger asks after a hurricane: can the deadlines be extended? Only when the IRS announces relief for a federally declared disaster, under Internal Revenue Code §7508A and the procedures in Rev. Proc. 2018-58. That does happen in Florida, but it is never automatic, and it should never be assumed when the calendar is planned. Whether a transaction qualifies, how it is reported and what happens to your basis are questions for your CPA, attorney and intermediary. The property is ours.