January Topic: 1031 Exchange Timelines & Identification Rules
A “Delayed Exchange” contains strict timelines which must be met for an exchange to be valid.
The 45 Day Identification Period
Begins the day the Relinquished Property is transferred by the Exchangor, usually considered the closing of escrow. An Exchangor has 45 days to identify a replacement property.
180 Day Exchange Period
Also begins the day the Relinquished Property is transferred by the Exchangor. The Exchangor has 180 days to complete the exchange.
These timelines cannot be extended unless an investor’s exchange is effected by a federally declared disaster.
Identification of Replacement Property
The identification must be sent or delivered in writing by the Exchangor to someone involved in the exchange who is not a disqualified party. For an identification to be valid it must be received by a qualified party my midnight the 45th day. Identifications are usually made to the Facilitator.
Properties must be “unambiguously” identified by address or legal description.
The taxpayer may identify:
a. Up to three properties of any value, or
b. Any number of properties providing the total value of all the identified properties does not exceed 200% of the fair market value of all property relinquished.
c. If more than three properties are identified and they exceed 200% of the relinquished property’s value, 95% of the aggregate value of the properties identified must be acquired.
Today more than ever the 45th day is critical. At that date you must be committed to completing the exchange, because any property ID’d must be acquired before any residual exchange funds can be dispersed.
If property is ID’d that is not desired, any remaining exchange funds will be locked in the exchange account until day 181. Therefore if property has been ID’d that is not desired, the identification form should be rescinded before midnight the 45th day.
See our flyer on when funds can be received in an exchange for further details.
HAPPENING NOW
The Equity Advantage Incorporated & IRA Advantage YouTube Channels
Can’t make our monthly Equity Advantage and IRA Advantage Continuing Education Seminars? Now catch some of the highlights available online from the comfort of your cell phone or computer!
Head to our channels and watch as owner of Equity Advantage and IRA Advantage, David Moore speaks on the basics of 1031 Exchanges and Self-Directed IRA’s in today’s market, including What Is An Exchange, What Can Be Exchanged, How Are Self-Directed IRA’s created, and more!
Subscribe to our channel for more videos!
New Video Series!
Getting Started with Investment Real Estate
Stay tuned for our newest series of Ask The Experts, where we cover the latest updates in Investment Real Estate. Join David Moore and Robert Zink, Zink Realty Advisors as they touch on DST’s, senior housing, and more in part 1!
For more 1031 Exchange videos check out our channel today!
Seminar RSVP:
[email protected]
or call 503-635-1031
The Guys With All The Answers…
David and Thomas Moore, the co-founders of Equity Advantage & IRA Advantage
Whether working through a 1031 Exchange with Equity Advantage, acquiring real estate with an IRA through IRA Advantage or listing investment property through our Post 1031 property listing site we are here to help Investors get where they want to be. About Us…
Once I identify a few properties within the 45 day period, can I still search & change my mind, & purchase another property not identified as long as I close within the 180 day period? Or am I stuck with only those identified in the first 45 days?
You are stuck with what you have identified! That is why this time frame is so important, and we urge you to never identify anything you would not want to purchase.