180-Day Rule (Exchange Period)
The 180-day rule requires a 1031 exchanger to close on the replacement property within 180 calendar days of closing the relinquished property, or by their tax return due date (including extensions), whichever is earlier.
What it means
The 180-day rule is the second hard deadline in a 1031 exchange. It runs concurrently with the 45-day identification period — the clocks start on the same day and day 180 is calendar, not business.
There is a second, often-overlooked constraint: the deadline is the earlier of (a) 180 days after the relinquished property closed, or (b) the due date of the taxpayer's federal income tax return for the year the relinquished property was sold. If a relinquished property closes in October, November, or December and the taxpayer does not file an extension, the April 15 return deadline can cut the exchange short. Filing Form 4868 for an extension preserves the full 180 days.
Missing the 180-day deadline converts the relinquished property sale into a taxable event retroactively.
Example
Close the downleg on March 1. The 180-day window ends August 28. The taxpayer must close on one or more identified replacement properties by that date.
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