1031 Exchange 45-Day and 180-Day Rules: A Plain-English Timeline
Two clocks start the day you sell. Here's how they run, and what has to happen first.
7 min read · Updated Oct 2026
You're ready to sell an apartment or commercial building, but you want to stay in real estate without handing a large share of the gain to taxes this year. A 1031 exchange can make that possible, but two strict clocks start the day you sell, and missing one can undo the whole plan. This guide explains the 45-day and 180-day rules, what has to be in place before you close, and the New Jersey forms nonresident sellers should know.
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Key takeaways
- Both clocks start when you transfer the property you're selling: 45 days to identify replacement property, and 180 days (or your tax return due date, if earlier) to receive it.
- The days run at the same time and count calendar days. Treat the dates as fixed.
- Line up a qualified intermediary before closing. Your agent or a related party can't serve as one.
On this page
What a 1031 exchange is
Section 1031 lets you defer the tax on a gain when you exchange real property used in a business or held for investment for other like-kind real property. The IRS says real properties are generally like-kind to each other, whether improved or unimproved. An apartment building, for example, is generally like-kind to another apartment building [2]. A few limits [2]:
- Since 2018, it applies only to real property, not equipment or vehicles.
- Real property held primarily for sale doesn't qualify.
- U.S. real property is not like-kind to property outside the U.S.
- If you receive cash or other non-like-kind property, you must recognize gain to that extent.
The two deadlines
Most exchanges are "deferred": you sell first and buy later. Both clocks start on the day you transfer the property you're giving up [1].
The 45-day rule: identify
You must identify replacement property within 45 days. The regulations say the period ends at midnight on the 45th day [3]. Identification must be in writing, signed by you, and delivered to the right party, such as your qualified intermediary. The property must be clearly described, for example by legal description, street address, or a distinguishable name [1]. If you don't identify property properly in time, the exchange generally fails and the sale is taxed normally, which is why many owners start looking before they sell.
The 180-day rule: close
You must receive the replacement property within 180 days, or by the due date of your tax return (including extensions), whichever is earlier [1]. The two periods run at the same time: the 45 days are part of the 180, not added to them.
Example dates
These are illustrations. Confirm your own dates with your intermediary.
| If you close the sale on | Day 45 | Day 180 |
|---|---|---|
| Oct. 15, 2026 | Sun., Nov. 29, 2026 | Tue., Apr. 13, 2027 |
| Nov. 16, 2026 | Thu., Dec. 31, 2026 | Sat., May 15, 2027 |
In the second example, day 180 lands after the usual April 15, 2027 filing date. Without an extension, the window could close early, so ask your CPA about filing one. The rules count calendar days; don't assume a weekend or holiday adds time.
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How many properties can you identify?
Under the regulations, you can generally identify either [3]:
- Up to three properties of any value (the "3-property rule"), or
- Any number of properties, as long as their total fair market value doesn't exceed 200% of the property you sold (the "200-percent rule").
A narrower fallback, the 95-percent rule, applies only if you actually receive at least 95% of the value of everything you identified [3].
The qualified intermediary
In a deferred exchange, a qualified intermediary (QI) is commonly used to hold the proceeds and handle the paperwork. The IRS says your agents and related parties aren't eligible to serve as your QI; they're "disqualified persons" [1]. Set up the intermediary before your sale closes.
Watch out for related parties
Exchanges with related parties have special rules. The IRS lists a spouse, child, grandchild, parent, grandparent, brother, sister, and certain related entities. If either side disposes of the exchanged property within 2 years after the last transfer, the deferred gain generally must be reported [1].
New Jersey details: nonresident sellers and GIT/REP forms
If you live outside New Jersey and sell NJ real property, the Division of Taxation says nonresident sellers must pay estimated income tax of 2% of the consideration at or before closing [4]. A nonresident completes Form GIT/REP-1 unless an exemption (GIT/REP-3) or a waiver (GIT/REP-4) applies [6].
GIT/REP-3 includes an exemption for gain not recognized under Section 1031. If part of the deal isn't like-kind, the form lets the seller pay 2% of the nonexempt amount at recording. If a deferred exchange is voided, the qualified intermediary must complete a GIT/REP-1 and pay 2% of the total consideration [5].
A simple pre-sale checklist
1. Talk with your CPA about whether an exchange fits your situation.
2. Line up a qualified intermediary before you sign the sale contract.
3. Start looking at replacement properties early.
4. Put your day-45 and day-180 dates on the calendar the day you close.
5. If you're a nonresident seller of NJ property, ask your attorney about the GIT/REP forms.
Related: 1031 exchange basics · Selling an apartment building
Start the planning before the sale. Share a few details about your apartment building to request a confidential callback. · Own commercial property instead? · Prefer to talk? Call or text .
Sources
- IRS, Instructions for Form 8824. the 45/180-day periods and the return-due-date limit; identification requirements; QIs and disqualified persons; the related-party list and 2-year rule.
- IRS, Like-kind exchanges – Real estate tax tips. real property only since 2018; like-kind definition and the apartment example; held-for-sale and foreign property limits; gain on other property or money.
- eCFR, 26 CFR 1.1031(k)-1. midnight on the 45th day; the 3-property, 200-percent, and 95-percent rules.
- NJ Division of Taxation, Estimated tax for nonresident sellers of real property. estimated tax of 2% of consideration; exemptions and waivers on GIT/REP-3 and -4.
- NJ Division of Taxation, Form GIT/REP-3. the Section 1031 exemption box; the nonexempt-portion 2% option; the QI's obligation if an exchange is voided.
- NJ Division of Taxation, Technical Bulletin TB-57(R). GIT/REP-1 unless exempt (GIT/REP-3) or waived (GIT/REP-4).
Related
General information, not legal, tax, or financial advice.