You can start before you select replacement property
A delayed exchange can start before you select replacement property. Contact a Qualified Intermediary before the relinquished-property sale closes.
Do not receive or control the sale proceeds. The exchange agreement and funds structure must exist before the applicable transfer.
What starts after the sale
The written identification period starts on the relinquished-property transfer date. The period ends 45 days after that date.
The taxpayer must identify replacement property in a signed written document. The document must describe each property in a clear manner.
The exchange period also starts on the transfer date. It can end before day 180 because of the federal tax-return due date.
Prepare before closing
- Confirm the taxpayer and current title holder.
- Give the exchange team the sale contract and expected closing date.
- Give the team the title and escrow contacts.
- State the target property type and location.
- State the expected replacement-property value and financing range.
- Identify the tax advisor, attorney, broker, and lender.
- Set a process for candidate-property review.
Use the 45-day period carefully
The 45-day period is short. Property search, inspections, financing, negotiation, and written identification can all occur during this period.
Do not wait until the last days to confirm the written format and delivery method. Ask the exchange team and your advisors about the required process.
A delayed-exchange sequence
- Contact the exchange team before the sale closes.
- Sign the approved exchange documents before the transfer.
- Keep the proceeds inside the exchange structure.
- Search for replacement property.
- Review the candidate properties with your advisors.
- Deliver the signed identification no later than the end of the period.
- Complete the purchase within the exchange period.
Frequently asked questions
Must I identify replacement property before the sale?
No. The federal identification period starts after the relinquished-property transfer.
Can I identify more than one property?
Yes. Federal rules include three-property, 200-percent, and 95-percent methods. Ask your tax advisor to review the selected method.
Can I change the identification later?
You can revoke an identification before the identification period ends. The written revocation must satisfy the applicable delivery rules.
What if I do not identify property by day 45?
The transaction will not meet the federal identification requirement. Contact your tax advisor and attorney to review the tax result.
Open the exchange before closing
Call 888-747-1031 before the sale closes. Tell the team that you did not select replacement property.
This page gives general information. It does not give tax, legal, real estate, investment, lending, or financial advice.