Miss either deadline and your exchange fails. Here's everything you need to know.
When you close on the sale of your relinquished property, two clocks start simultaneously:
Clock 1. The 45-Day Identification Deadline
Identify replacement property in signed writing within 45 calendar days. Weekends and holidays normally do not extend this period. Eligible IRS disaster relief may postpone it under an applicable notice.
Clock 2. The 180-Day Closing Deadline
You have 180 calendar days to close on the replacement property. This runs concurrently with the 45-day clock, not sequentially.
Your identification must be:
You can identify up to three properties using the 3-Property Rule, regardless of their value. This is the most common approach.
Alternatively, the 200% Rule allows you to identify more than three properties as long as the total FMV of all identified properties doesn't exceed 200% of your relinquished property's value.
The 95% Rule allows unlimited identification if you acquire at least 95% of the total identified FMV.
Yes, but only within the 45-day window. You can revoke and resubmit your identification any number of times before midnight of Day 45. After that, it's locked. You can only acquire properties from your identified list.
The 180-day window is subject to an important caveat: it expires on the earlier of 180 days or the due date of your tax return (including extensions) for the year the sale occurred.
If you sell a property in November or December, your 180-day window may be cut short by the April 15 tax filing deadline. Filing a tax extension to October 15 gives you the full 180 days. This is one reason CPAs always recommend filing an extension for exchanges that close late in the year.
Miss the 45-day deadline: Without valid identification or timely acquisition, and absent applicable IRS relief, the deferred exchange generally cannot qualify. Funds are not automatically returned on Day 46; the exchange agreement and Treasury fund-release rules control.
Miss the 180-day deadline: Exchange fails for any properties not yet closed. If you've already closed on some identified properties, those may still qualify, but any remaining proceeds become taxable.
The IRS has granted deadline extensions only for Presidentially declared federal disasters (per Rev. Proc. 2018-58). COVID-19 triggered a temporary extension in 2020. Outside of declared disasters, there are no other exceptions, not illness, not attorney error, not market conditions, not financing delays.
Start identifying replacement properties before you sell. The 45-day window feels long until you're in it. Have one or two serious candidates under contract before your relinquished property closes so you're not scrambling.
Use our free Deadline Calculator to track your exact dates the moment you close.
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