What Is the Timeline for a 1031 Exchange Application?

In a typical 1031 exchange, the property owner has 45 calendar days from the closure of the sale of the current or "relinquished" property to identify the replacement property. The property owner should already have in place a qualified intermediary and be prepared to complete necessary paperwork related to the current property and prospective new property.

Once the new property has been identified, the owner has 135 more days (180 calendar days in total from the closure of the sale of the current property) to complete the 1031 exchange and close on the purchase of the new property.

By the last day, the property owner must also file income taxes for the year in which the current property was sold to obtain the deferral.

Property owners may be able to obtain an exemption for this timeline when the property or the property owner is in a declared disaster area during the 1031 exchange process.

Note that the property owner can withdraw the 1031 exchange application prior to identifying the replacement property. After that property is identified, however, the application can no longer be withdrawn.