The 1031 exchange calendar: 45 days and 180 days, and neither one moves

A 1031 exchange lets an investor sell property held for investment or business use and defer the capital gain by rolling it into replacement property. It is one of the few genuinely large tax levers in real estate, and it is also one of the easiest to blow. Two clocks start on the day the relinquished property closes. Within 45 days the replacement property has to be identified in writing. Within 180 days the replacement has to close. The 180-day clock runs from the same start date — it is not 45 plus 180. Both deadlines are statutory and there is no extension for a deal falling apart, a lender dragging its feet or a holiday. The second rule is about custody. The seller cannot receive the proceeds, not even for a day. A qualified intermediary has to be engaged BEFORE the sale closes and has to hold the funds. Money that lands in the seller's account has ended the exchange, and no amount of paperwork afterward undoes that. Identification has its own arithmetic: the familiar three-property rule, and alternatives based on total value, each with its own conditions. Investors who identify a single property and then lose it to a failed inspection have no fallback. Primary residences do not qualify. Property held mainly for resale does not qualify. And a deferral is exactly that — the gain follows the taxpayer into the next property. This article is general information, not legal, tax or financial advice. Rules change and every deal is different — check your own case with a licensed professional. Alberto Zaltzberg — Adonait · adonait.com