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Rules & Deadlines

1031 Exchange Rules and Deadlines

Two clocks start the day your sale closes, they run at the same time, and neither can be paused. Almost every failed exchange traces back to misunderstanding one of them.

The short answer

You have 45 calendar days from your sale closing to identify replacement property in writing, and 180 calendar days to close on it. Both clocks start on the same day and run concurrently — the 180 days include the 45. To defer the full gain you must buy equal or greater value, reinvest all proceeds, and replace any debt paid off.
The Easy1031 Exchange DeskLast reviewed September 1, 2026

The two clocks

Both deadlines begin on the day title to your relinquished property transfers — not the day you sign a contract, and not the day funds clear. They run concurrently, which is the single most common misunderstanding: the 180-day period does not start after the 45-day period ends. By the time you finish identifying, a quarter of your closing window is already gone.

Day 0

Relinquished sale closes

Proceeds wire to the qualified intermediary. Both clocks start.

Day 45

Identification deadline

Signed written notice delivered to the intermediary by midnight.

Day 180

Closing deadline

Replacement purchase must close. Capped by your tax return due date.

The three identification rules

Within the 45-day window you must identify replacement property under one of three rules. You only need to satisfy one, and most investors use the three-property rule because it is the simplest:

The three 1031 exchange identification rules
RuleHow many propertiesValue limit
Three-property ruleUp to threeNone — any value
200% ruleAny numberCombined value ≤ 200% of what you sold
95% ruleAny numberNo cap, but you must acquire ≥ 95% of the identified value

Identification must be unambiguous — a street address or legal description, not “a warehouse in Dallas.” It must be signed by you and delivered to your qualified intermediary (or another permitted party who is not a disqualified person) on or before midnight of day 45. You may revoke and re-identify freely within the window; after it closes, the list is final.

The equal-or-greater-value test

To defer the entire gain, three conditions must all hold:

  1. The replacement property’s purchase price is equal to or greater than the relinquished property’s net sale price.
  2. All net proceeds held by the intermediary are reinvested.
  3. Debt paid off on the sale is replaced with equal or greater new debt, or made up with additional cash out of pocket.

Fail any one of them and the shortfall is boot — taxable up to the amount of your realized gain. Partial deferral is still permitted and still valuable.

Six mistakes that disqualify exchanges

  • Closing the sale before the intermediary is engaged

    The exchange agreement must be in place before the relinquished property closes. If proceeds reach you or your attorney's trust account, you have constructive receipt and the exchange cannot be salvaged.

  • Treating day 45 as a business day

    Both clocks run on calendar days. Weekends, federal holidays and the day your closing agent is on vacation all count. There is no extension for a deadline landing on a Sunday.

  • Identifying informally

    Identification must be an unambiguous written description — a street address or legal description — signed by you and delivered to the intermediary or another permitted party by midnight on day 45. A phone call does not count.

  • Missing the tax-return cap on the 180 days

    The 180-day window ends on the earlier of 180 days or your tax return due date for that year. A November sale can compress the window to well under 180 days unless you file an extension.

  • Buying down in value or debt

    Acquiring replacement property worth less than the relinquished one, or carrying less debt without adding cash, creates taxable boot. Partial deferral still works, but the shortfall is taxed.

  • Exchanging into a property you intend to move into

    Replacement property must be held for investment or business use. Converting quickly to a primary residence invites challenge; safe-harbour guidance points to holding and renting it for a meaningful period first.

Can the deadlines ever be extended?

Only through IRS disaster relief. When the IRS issues a notice covering a federally declared disaster area, affected taxpayers may receive additional time — commonly up to 120 days. Outside of that, the deadlines are statutory. A failed financing, a seller walking away, an appraisal coming in short: none of these extend anything.

The practical defense is to identify backup properties inside the 45-day window. The three-property rule lets you name two alternates at no cost, and it is the cheapest insurance in the entire process.

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Rules Questions

1031 exchange rule FAQs

What is the 45-day rule in a 1031 exchange?

From the day your relinquished property closes, you have 45 calendar days to identify potential replacement property in a signed written notice delivered to your qualified intermediary. Weekends and holidays count, and there is no extension. Once day 45 passes you can only acquire property you already identified.

What is the 180-day rule in a 1031 exchange?

You must close on your replacement property within 180 calendar days of the relinquished property closing. The two clocks run concurrently from the same start date, so the 180-day period includes the 45-day identification window — it does not begin after it. The deadline is also capped by your tax return due date for the year of the sale, including extensions.

What are the three identification rules?

The three-property rule lets you identify up to three properties of any value. The 200% rule lets you identify any number of properties as long as their combined fair market value does not exceed 200% of what you sold. The 95% rule lets you identify any number of properties of any value provided you actually acquire at least 95% of the total value identified. You need to satisfy only one.

Can 1031 exchange deadlines be extended?

Only through an IRS disaster relief notice. When the IRS issues a notice for a federally declared disaster, affected taxpayers may receive additional time — typically up to 120 days. Outside of that, the 45-day and 180-day deadlines are statutory and cannot be extended for any reason, including financing failures or a seller backing out.

What happens if I miss a 1031 exchange deadline?

The exchange fails and the transaction is treated as an ordinary sale. Your intermediary returns the funds and the full gain becomes taxable in the year of the sale — capital gains, depreciation recapture, net investment income tax and state tax. This is why experienced investors identify backup properties within the 45-day window.

Do I have to buy a more expensive property?

To defer the entire gain, the replacement property must be of equal or greater value than the relinquished property, all net proceeds must be reinvested, and any debt paid off must be replaced with new debt or additional cash. Buying down is permitted but the difference is taxable boot.

How long must I hold the replacement property?

The code sets no specific holding period, only that the property be held for investment or business use. In practice, most advisors suggest at least one to two years, and holding it across two tax filings, to demonstrate investment intent. Intent at the time of acquisition is what matters, and a short hold invites scrutiny.

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