The 45/180-Day Exchange Clock

A Section 1031 like-kind exchange used to be available for many kinds of business property; the 2017 tax law restricted it to real property held for investment or use in a trade or business, exchanged for other real property of a similar nature. Personal property — vehicles, equipment, and the like — no longer qualifies at all. A primary residence still does not qualify under 1031 either, exchange or no exchange: this is an investment-property mechanism, not a homeowner one.

From the date the original property is transferred, the exchanger has forty-five calendar days to identify potential replacement property in writing to the qualified intermediary — not forty-five business days, and no extension exists for weekends or holidays landing on the deadline unless a formally declared disaster relief applies. Identification is a naming exercise, subject to specific rules on how many properties may be named; it is a separate, earlier deadline from actually closing on one.

The exchanger must receive the replacement property by the earlier of one hundred eighty calendar days after the original transfer, or the due date (with extensions) of the tax return for the year of the transfer. Both the forty-five-day identification window and the one-hundred-eighty-day exchange window start counting from the same day — the closing of the relinquished property — they do not stack one after the other.

To qualify as a like-kind exchange rather than a plain taxable sale followed by a purchase, the exchanger generally must not have actual or constructive receipt of the sale proceeds at any point. In practice this means using an independent qualified intermediary who holds the funds between the sale and the purchase; receiving the cash directly, even briefly, before reinvesting it is a common way an intended 1031 exchange is disqualified after the fact.