Calculating Deadlines In a 1031 Exchange

Anyone who wants to complete a #1031 exchange to defer capital gains taxes must understand IRS timing rules. Internal Revenue Code requires that you identify your replacement property (or properties) within 45 days of closing on the sale of your old property. You must then close on the property within 180 days, a time period that runs concurrently with the 45 days.

But how are those days calculated? Does it include weekends? Holidays?

The IRS is clear that the 45 & 180 days are calendar days, and no dates are excluded from the calculation. If your 45th day falls on a weekend or holiday, that day is still the deadline for identification of new properties. If you miss the deadline, even if by one day, the IRS will disallow your exchange. They don’t entertain extension requests, either.

Plan accordingly and avoid unexpected tax consequences.

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