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A 1031 exchange is a strict, rules-based process. One of the most critical rules is the 45-day identification window. From the day you close on the sale of your relinquished property, the IRS gives you exactly 45 calendar days to formally identify potential replacement properties.
here are no extensions for weekends or holidays. Missing this deadline by even one day disqualifies your exchange, making your entire capital gain immediately taxable.
Investors typically use one of two rules to identify property:
The 3-Property Rule: Identify up to three properties of any value.
The 200% Rule: Identify any number of properties, provided their combined fair market value does not exceed 200% of the sold property.
Because finding and vetting quality real estate in just 45 days is incredibly stressful, many investors turn to Delaware Statutory Trusts (DSTs) as backup or primary replacement properties. Partnering with Customized 1031 ensures you have a strategic plan in place well before the clock starts ticking.
