When Are 180 Days NOT 180 Days?
When do we have less than 180 days to complete a 1031 exchange?
The 1031 regulation states that an exchange must be completed within 180 days OR the due date of the taxpayer’s Federal income tax return, whichever is earlier. Relinquished properties closed between October 18th and December 31 would have less than 180 days without an extension of time on their tax return. A taxpayer may file an automatic extension of their tax return, which would extend the time to file and allow the 180 days.
There are no extensions to the 180 day rule. If the exchange is not completed within the time stated above, the exchange is done and any portion of the exchange that is not complete is subject to capital gains tax.