45 days, then 180.
Neither can be extended
A like-kind exchange defers the entire federal gain. It also fails completely if a date is missed by a day, or if the proceeds touch your account.
Before you read on
- General information, not tax advice. A 1031 exchange must be set up by a qualified intermediary and reviewed by your own adviser.
- Reinvent NY works in New York real estate and does not act as an intermediary.
Point 1What it defers and what it does not
Section 1031 lets you sell investment or business real property and roll the proceeds into other US investment real property without recognising the gain. The tax is not forgiven, it is carried into the new property in a lower cost basis, and it comes due when you eventually sell without exchanging again.
Since 2018 it applies to real property only. Personal residences do not qualify. A property you occupy part of the year does not qualify for the part you occupy.
Point 2The two clocks
| Deadline | Runs from | What must happen |
|---|---|---|
| 45 days | Closing on the sale | Identify replacement property in writing to the intermediary |
| 180 days | Closing on the sale | Close on the replacement property |
| Tax return due date | End of the tax year | 180 days is cut short if your return is due first — file an extension |
Both clocks start on the same day and run concurrently. They are calendar days, including weekends and holidays, and the IRS does not grant extensions outside a declared disaster. A sale that closes on 1 March means identification by 15 April and closing by 28 August.
Point 3Identification, and the three rules
Identify up to three properties of any value. You may close on one, two or all three. This is what almost everyone uses.
Identify any number of properties provided their combined value does not exceed 200% of what you sold.
Identify any number of any value, but you must then acquire at least 95% of the total value identified. Missing it fails the whole exchange.
Point 4Where exchanges fail
| Failure | What happens |
|---|---|
| Proceeds land in your account | Constructive receipt. The exchange is void from the start. |
| Intermediary appointed after closing | Too late. The intermediary must be in place before the sale closes. |
| Replacement worth less than the sale | The shortfall is boot and is taxed. |
| Debt on the new property is lower | The reduction is mortgage boot and is taxed. |
| Identification is vague | Must be unambiguous — a street address or legal description, not a description of a type. |
| Buying from a related party | Restricted, and both sides must hold for two years. |
To defer the whole gain, the replacement must be equal or greater in value, the whole of the equity must be reinvested, and the debt must be equal or greater. Any of the three falling short creates boot, and boot is taxable in the year of the exchange.
Point 5If you are not a US taxpayer
A 1031 exchange is available to a foreign investor, and the replacement property must also be in the United States — foreign property is not like-kind to US property. FIRPTA withholding still applies to the sale unless a withholding certificate is obtained, and 15% of the price leaving the transaction will usually break the reinvestment test. Apply for the certificate at the same time you appoint the intermediary, not afterwards.
Yes. Since the 2018 change all US real property held for investment or business use is like-kind to all other US real property. The constraint is the use, not the type.
There is no statutory period. Intent to hold for investment is what matters, and one to two years is the commonly cited comfort zone.
Typically $1,000 to $2,000 for a straightforward exchange. Against a deferred gain in six figures this is not where to economise, and the intermediary's financial standing matters because they hold your money.
Converting a replacement property to a residence is possible but has its own holding requirements and reduces the exclusion available on eventual sale. Take advice before, not after.
Let’s talk first
If you are selling US investment property and want to roll the proceeds, tell us the timing and we will map the two deadlines against the search.
RELATED GUIDES
Recent transactions
A sample of the sales, purchases and rentals we acted on in 2025 and 2026.
Real estate brokerage services are provided through R New York.
Important notice
The figures on this page are general information as of August 2026 and do not represent an offer, a quote, or a guarantee of any transaction terms. Reinvent NY does not provide legal, tax, or investment advice. Confirm anything material with an attorney and a CPA before you act on it. Nothing here is a solicitation to invest, and no return is promised. Real estate brokerage services are provided through R New York.