The 45-Day Rule

Replace­ment prop­er­ty gen­er­al­ly must be iden­ti­fied with­in 45 days after the relin­quished prop­er­ty is trans­ferred.

The iden­ti­fi­ca­tion should clear­ly describe the prop­er­ty and meet the applic­a­ble writ­ten-iden­ti­fi­ca­tion require­ments.

The 180-Day Rule

The replace­ment prop­er­ty gen­er­al­ly must be received by the ear­li­er of:

• 180 days after the relin­quished prop­er­ty is trans­ferred, or
• The due date of the tax­pay­er’s fed­er­al income-tax return, includ­ing exten­sions, for the year of the trans­fer.

These dead­lines are gen­er­al­ly strict and should be tracked care­ful­ly with the Qual­i­fied Inter­me­di­ary and tax pro­fes­sion­als.

Key Point: The 45 and 180 days are cal­en­dar days, not busi­ness days. Begin replace­ment-prop­er­ty research before clos­ing when­ev­er pos­si­ble.

Ref­er­ence Sources

• IRS — Instruc­tions for Form 8824

Impor­tant: This mate­r­i­al is for edu­ca­tion­al pur­pos­es only and is not tax, legal, account­ing, or invest­ment advice. Sec­tion 1031 out­comes depend on the tax­pay­er’s facts and com­pli­ance with applic­a­ble require­ments.