A common misconception is that investors using a 1031 exchange to defer capital gains tax liabilities have 180 days to complete their exchange. Actually, IRC Section 1031 requires that taxpayers acquire all replacement property/properties by the earlier of 180 days from the sale of the relinquished propertyor the Federal tax return due date for the year in which the exchange commenced. So for the first time, if you sold your investment property anytime after October 17, you don’t need to file an extension to get the full 180 days.
Once the exchange is complete, you can file your return and report the exchange on IRS Form 8824 - Like-Kind Exchanges. Once you have filed a return, it typically cannot be amended to report an exchange. Filing a return while in the middle of a 1031 exchange only serves to shorten the allowed 180-day completion timeframe.
Questions about your ongoing or planned 1031 exchange? Realized 1031 can provide you with the finer points of information concerning 1031 Exchanges and other investment issues. Learn more by logging on to www.realized1031.com or by calling 877-797-1031.
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