Selling investment property? Plan your 1031 exchange before closing.

A qualifying 1031 exchange can defer gain on real estate held for investment or business use. Full deferral requires more than reinvestment: meet the like-kind, timing, taxpayer, and exchange-structure rules and avoid taxable boot.

Track Your Deadlines
Day 45. ID Deadline
Nov 26, 2026
45
days left
Day 180. Ordinary Outer Limit
Apr 10, 2027
180
days left

Calendar-day estimates only. The exchange deadline is the earlier of day 180 or your federal return due date, including extensions. Eligible IRS disaster relief may change dates; confirm with your QI.

The Basics

How a 1031 exchange actually works

馃彔
Day 0
You close
QI receives proceeds, not you.
馃搵
Day 45
ID deadline
Identify replacement property in writing; calendar days count.
馃攽
By Day 180 or earlier
Close deadline
Receive replacement by the earlier of day 180 or the federal return due date, including extensions.
鈿狅笍

The golden rule: For a typical QI-facilitated deferred exchange, arrange the exchange before transferring the relinquished property and avoid actual or constructive receipt of sale proceeds. A cash sale followed by a purchase is not a qualifying exchange. Partial exchanges, permitted distributions, and other safe harbors need professional review.

Exchange Structures

Four ways to structure your exchange

Forward Exchange
Sell first, buy second. The standard sequence, most common and straightforward.
Reverse Exchange
Buy first, sell second via an EAT. Useful when you cannot lose the replacement property.
Improvement Exchange
Build or renovate on the replacement while it is held by an EAT. Deploy full exchange value.
DST Exchange
Exchange into a fractional interest in institutional real estate. Passive, hands-off ownership.
Quick Estimate

What tax might a qualifying exchange defer?

Property Details
$
$
$
Tax Rate Assumptions
Illustrative Tax on Sale
$152,500
Unrecaptured 搂1250 (max. 25%)$12,500
Federal Cap Gains*$110,000
Net Investment Income Tax$0
State Tax$30,000
Straight-line real-property depreciation only, using the maximum 25% unrecaptured 搂1250 rate and entered flat capital-gain/state rates. No selling costs, ordinary recapture, 搂1231 lookback or loss netting are modeled. NIIT is included only if selected. Actual gain rates depend on taxable income and filing status; a qualifying exchange may defer eligible gain, not necessarily all tax shown.
Common Questions

Frequently asked questions

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