Day 180 is not always the final day
The exchange period starts on the relinquished-property transfer date. It ends on the earlier of two federal dates.
The first date is day 180. The second date is the federal tax-return due date, with valid extensions.
Ask the tax advisor to confirm the actual exchange end date. Do not build the closing plan from day 180 alone.
Plan backward from the closing date
The taxpayer must receive replacement property no later than the end of the exchange period. It must be substantially the same identified property.
Create time for these transaction parts:
- Purchase contract conditions.
- Property inspections and reports.
- Loan application and lender approval.
- Appraisal and underwriting.
- Title review and required corrections.
- Insurance approval.
- Entity and taxpayer review.
- Exchange documents and assignments.
- Escrow and funds instructions.
- Final settlement statement review.
Risk points in the exchange period
A lender delay can move the replacement closing. A title defect or insurance problem can also move the closing.
A contract extension does not extend the federal exchange period. A Qualified Intermediary also cannot change that period.
The taxpayer can identify multiple properties under the applicable rules. Ask the tax advisor to review any backup-property strategy.
A closing plan
- Confirm the relinquished-property transfer date.
- Confirm day 180.
- Confirm the federal tax-return due date.
- Use the earlier date as the planned exchange end date.
- Add internal time for lender, title, and escrow delays.
- Confirm that the closing property matches the written identification.
- Review the final documents before the closing date.
Does the exchange period start after day 45?
No. Both federal periods start on the relinquished-property transfer date.
Can a contract extension move the exchange end date?
No. A private contract extension does not change the federal exchange period.
Can a tax-return extension give more exchange time?
A valid return extension can prevent an earlier return due date from ending the period. Ask the tax advisor to confirm the filing plan.
Can the replacement closing occur on day 180?
The federal rule can permit receipt on day 180 when no earlier return due date applies. A same-day problem can prevent timely receipt.
Confirm the actual end date
Ask the tax advisor to confirm the date. Then, give the date to the Qualified Intermediary, lender, title, escrow, and broker teams.
This page gives general information. It does not give tax, legal, filing, lending, title, investment, or financial advice.