1031 exchange is the swap of two similar investment properties that defer the capital gains taxes but there is a timeline in which the swap must occur. In this article, we will explain the time period you should know when looking to 1031 exchange two investment properties.
The 1031 exchange is actually very common and investors even refer to one another saying let’s 1031 this or that building to another.
What are 1031 exchange timelines?
As simple as it is there are two timelines you should know about when 1031 exchanging investment properties.
First 45 Days
The first timeline is the first timing which is 45 days. In this initial 45 day timeframe, the intermediary which is the middlemen that hold the cash must be furnished with a statement that shows the replacement property. You can think of this as selecting the replacement property and identifying the property.
45 to 180 Days – Second Timing
The replacement property must be closed within 135 days after the initial 45 days. From the first day of the 1031 exchange, you will have 180 days to finish off the sale of the old property and close the acquiring of the new property. Think of this last timeline as finalizing everything and concluding the exchange.
For the answers of your questions and the complete guide, read 1031 exchange rules.