The 45-day rule in a 1031 exchange

When does the 45-day clock start?

The identification period generally begins on the date you transfer the relinquished property — in most transactions, the closing date. Day 45 is counted in calendar days, including weekends and holidays, and the deadline is not pushed to the next business day.

Because the clock starts at closing, investors who begin searching only after they sell are already spending their window.

What counts as a valid identification?

Identification is typically made in a signed written document that unambiguously describes each property — commonly a street address or legal description — and is delivered before midnight of day 45 to a party involved in the exchange who is not you or a disqualified person. In practice this is usually your Qualified Intermediary.

An informal shortlist, a saved search on a listing site, or a conversation with your broker is not an identification. Confirm the exact format and delivery method your Qualified Intermediary requires well before day 45.

What happens if you miss the 45-day deadline?

If no replacement property is properly identified in time, the exchange generally cannot proceed, and the sale is typically treated as a taxable sale for the year of the transfer. This is why experienced investors treat day 45 as the real deadline for their entire search — not just for paperwork.

How experienced investors protect the window

Investors who finish comfortably usually do the same things.

• ·Start the replacement search before the relinquished property closes.
• ·Keep more candidates in play than you expect to need — fallout is normal.
• ·Confirm the exact identification format with your Qualified Intermediary in week one.
• ·Track your day count somewhere you actually look — a dashboard, not a memory.

Frequently asked

Can the 45-day deadline be extended?

Ordinarily no. The IRS has provided limited deadline relief in some federally declared disaster situations. There is no general extension for needing more time to find a property. Confirm any possible relief with a qualified tax professional.

What happens if I miss the 45-day deadline?

If no property is properly identified by midnight of day 45, the exchange generally fails and the sale is typically treated as a taxable sale. Your Qualified Intermediary would generally return the exchange funds after the period ends. Confirm the consequences for your situation with a tax professional.

Does day 45 move if it falls on a weekend or holiday?

No. The identification period is counted in calendar days and is not extended to the next business day when it ends on a weekend or federal holiday.

Can I change my identification after submitting it?

An identification can generally be revoked and replaced with a new written identification at any time before the 45-day period closes, following the same delivery procedures. After day 45, the list is generally fixed.

How many properties can I identify?

Most investors identify up to three properties under the three-property rule. More than three is possible under the 200% rule, which limits the combined value of what you identify. Each framework is explained in our guides to the three-property rule and the 200% rule.