What happens if I miss the 45-day deadline on a 1031 exchange?

Missing the 45-day identification deadline ends the exchange the sale reverts to a normal taxable transaction, and the full capital gains tax bill comes due. According to JJ Gorena of The Trey Group, this is one of the most misunderstood parts of the process: "There are a lot of misconceptions. Some people think they have plenty of time, while others think they have no time."

 

The clock starts the day your San Antonio investment property closes, not before. Gorena recommends having the qualified intermediary and required paperwork in place before listing the property, so the 45 days are spent finding the right replacement rather than scrambling to get the exchange set up correctly in the first place.

 

Watch Episode 1 of "1031 Exchange, Explained": https://youtu.be/Kmbth-XiI50

Schedule a consultation with JJ Gorena: https://www.thetreygroup.com