In a 1031 exchange your exchange period (the time you have to complete your exchange) is 180 days. In most 1031 exchanges, this is pretty straight forward. However, things get a little interesting with exchanges that occur near the end of the calendar year.
If you were to sell your relinquished property on December 26, your 180th day would be sometime in mid-2025. The IRS doesn’t want to wait another tax year to find out about your exchange, so they cap your exchange period at the due date of the filing of your federal income tax return. If your 180th day falls after that, your exchange period is curtailed to that federal income tax filing deadline.
Thankfully, there’s an easy way to fix this issue if you give yourself enough time. Simply inform your CPA or tax-preparer that you are doing a 1031 exchange and that you’ll need to do an extension on your tax filing. That will give you the full 180 days for your 1031 exchange. In order to pull this off, you need to make sure that all of the professionals involved in your 1031 exchange are communicating with each other so that your CPA doesn’t accidentally file your return on time without requesting an extension.
1031 Tax-Deferred Exchange Services
CPEC1031, LLC offers tax-deferred exchange services to clients throughout the United States. Our team has been working hand-in-hand with taxpayers from all walks of life on their 1031 exchanges of rental properties, retail spaces, raw land, and more. If you are considering a 1031 exchange but don’t know where to begin, contact a qualified intermediary at CPEC1031 today to get started. We can help you figure out if a 1031 exchange is right for you and how to begin the process of exchanging your property.
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
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