1031Junction.com

Frequently, one of the most difficult components of a 1031 exchange is identifying a replacement property within the first 45 days following the sale of the relinquished property. The IRS is very strict in not allowing extensions.  We typically recommend indentifying at least one TIC or tenant in common property at least as back up replacement property to insure your ability to execute your exchange within the given time frame.
1031 Exchange time limits are very important.  This is a crucial step to executing any 1031 Exchange and must be taken extremely seriously.

There are 2 simple timelines that apply for anyone executing a 1031 tax deferred exchange should abide by and know:

The Identification Period: This is the crucial period during which the party selling a property must identify other replacement properties that he proposes or wishes to buy. It is not uncommon to select more than one property. This period is scheduled as exactly 45 days from the day of selling the relinquished property. This 45 days timeline must be followed under any and all circumstances and is not extendable in any way, even if the 45th day falls on a Saturday, Sunday or legal US holiday.

The Exchange Period: This is the period within which a person who has sold the relinquished property must receive the replacement property. It is referred to as the Exchange Period under 1031 exchange (IRS) rule. This period ends at exactly 180 days after the date on which the person transfers the property relinquished or the due date for the person's tax return for that taxable year in which the transfer of the relinquished property has occurred, whichever situation is earlier. Now according to the 1031 exchange (IRS) rule, the 180 day timeline has to be adhered to under all circumstances and is not extendable in any situation, even if the 180th day falls on a Saturday, Sunday or legal (US) holiday.

The §1031 exchange begins on the earliest of the following:

1. the date the deed records, or
2. the date possession is transferred to the buyer,

and ends on the earlier of the following:

1. 180 days after it begins, or
2. the date the Exchanger's tax return is due, including extensions, for the taxable year in which the relinquished property is transferred.

The identification period is the first 45 days of the exchange period. The exchange period is a maximum of 180 days. If the Exchanger has multiple relinquished properties, the deadlines begin on the transfer date of the first property. These deadlines may not be extended for any reason.
A deadline that falls on Thanksgiving, Christmas, or New Year's Day does not permit extension.
Identified replacement property that is destroyed by fire, flood, hurricane, etc. after expiration of the 45 day Identification Period does not entitle the Exchanger to identify a new property.
Failure to comply with all of these deadlines may result in a failed 1031 exchange.