Solomon C, Lao, CCIM.  Your Partner In Commercial Real Estate.


Delayed Exchange Deadlines...

The most common exchange variation is the delayed exchange format. The delayed exchange, which became popular after the well-known Starker decision [Starker v. United States 602 F2d 1341 (1979)], changes made by Congress in 1984, and the 1991 Final Regulations, can provide Exchangers the opportunity for simple and defensible exchanges. It is essential when using the delayed exchange to adhere to the §1031 deadlines.

The 1031 exchange BEGINS on the earlier of the following:

bulletThe date the deed records
bulletThe date possession is transferred to the buyer

The exchange ENDS on the earlier of the following:

bullet180 days
bulletThe date the Exchanger's tax return is due, including extensions, for the taxable year in which relinquished property is transferred

The IDENTIFICATION PERIOD is the first 45 days of the exchange period. The EXCHANGE PERIOD is a maximum of 180 days. If the Exchanger has MULTIPLE RELINQUISHED PROPERTIES, the deadlines begin on the transfer date of the first property. These deadlines may not be extended for any reason.

bulletA deadline that falls on a legal holiday or weekend does not permit extension.
bulletIdentified replacement property that is destroyed by fire, flood, hurricane, etc. after expiration of the 45 day Identification Period does not entitle the Exchanger to identify a new property.
bulletMistakenly identifying condominium "A," when condominium "B" was intended does not permit a change in identification after the 45 day Identification Period expires.

Failure to comply with these deadlines may result in a failed exchange. 

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This web site was last updated on 07/16/09 16:04 .