The 1031 Exchange Timeline, Step by Step

Before you list: get the pieces in place

Talk to your tax preparer to confirm the property qualifies and estimate what's at stake (the capital gains calculator gives you a quick preview). Choose a qualified intermediary — this is the step people miss, and it must happen before your sale closes. Then start browsing replacement properties early: your 45-day window will feel shorter than it sounds.

During your sale: wire in the intermediary

Tell your agent and the title company this is a 1031 exchange. Your intermediary prepares an exchange agreement you sign before closing, and adds "cooperation" language to the sale contract. At closing, the proceeds wire directly to the intermediary — you never see them.

Day 0: your sale closes

Both clocks start today and run at the same time. Calculate your exact dates and put them everywhere — calendar, phone, refrigerator.

Days 1–45: identify your replacement

You must name your replacement property (or a shortlist of candidates) in a signed, written letter delivered to your intermediary by midnight of day 45. The identification rules govern the list: most people name up to three properties, in case the first choice falls through. Smart exchangers get properties under contract before day 45, using the list as backup insurance.

Days 45–180: close on the new property

You can only buy property that was on your identification list. Your intermediary wires the held funds to the purchase closing, the deed records in the same taxpayer's name, and the exchange is complete. Remember the fine print: your real deadline is day 180 or your tax return due date, whichever comes first — late-year sellers should file a tax extension to protect the full window.

After closing: the tax return

File Form 8824 with your return for the year you sold, reporting both properties, the dates, and the deferred gain. Your new property carries a carryover basis, which your tax preparer uses to set up the new depreciation schedule.