Utilizing the Full Exchange Period When a 1031 Exchange Spans Two Tax Years

Utilizing the Full Exchange Period When a 1031 Exchange Spans Two Tax Years

Utilizing the Full Exchange Period When a 1031 Exchange Spans Two Tax Years

By: Juno Kenny

In a 1031 exchange, there are two crucial deadlines that must be strictly adhered to. The 45-Day Identification Deadline which dictates when replacement property must be identified by, and the 180-Day Exchange Deadline which dictates the latest date that identified property can be acquired. While both deadlines begin on the date that the relinquished property is sold, for exchanges that straddle two tax years, the 180-Day Exchange Deadline may be shortened by the taxpayer’s filing date unless an extension is filed.

Given the 2024 tax filing deadline of Tuesday, April 15th, 2025, those who begin exchanges between October 18th and December 31st will need to file an extension to utilize the full 180-day exchange period. Please note that S-Corporations have a tax filing deadline of March 15th in which case the above would apply to those who began exchanges between September 17th through December 31st. Please consult with your CPA/tax advisor regarding your federal and state tax filing requirements.

For more information on how to file an extension please see the link below:

https://www.irs.gov/filing/get-an-extension-to-file-your-tax-return

The 1031 exchange process can be complex, but strategic planning with your tax advisor and our team of experts at Genesis Bank Exchange can help maximize the potential of your investments. If you’re interested in learning more about the 1031 exchange process and how it may benefit you, connect with the Genesis Bank Exchange team by calling 800.797.1031, or explore further details on our website:  https://www.mygenesisbank.com/1031Exchange.

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