Missed a 1031 Exchange Deadline? Here’s What It Could Cost You

Timing is everything when it comes to a 1031 exchange. The IRS enforces two strict deadlines:

• 45 days to identify potential replacement properties

• 180 days to close on the replacement property

So, what happens if you miss either of these deadlines?

Miss the 45-Day Deadline?

If you don’t identify replacement properties within 45 days of selling your original property, your 1031 exchange is disqualified. That means the transaction will be treated as a regular sale, and you'll owe capital gains taxes on your profit.

Miss the 180-Day Deadline?

If you identify properties on time but fail to close within the 180-day window, your exchange also fails. Again, the IRS will treat the sale as taxable, and you’ll lose the tax deferral benefits.

The Bottom Line

There are no extensions or exceptions for missing these deadlines—unless you qualify for a federally declared disaster relief. To protect your investment and avoid unexpected taxes, it’s crucial to plan carefully and work closely with a Qualified Intermediary.

Missing a deadline can be a costly mistake. Stay organized, stay informed, and stay on track to make the most of your 1031 exchange.