A California escrow involves a 1031 tax-deferred exchange. The seller (exchanger) wants to use the proceeds from the sale of a rental property to acquire a replacement property. The escrow officer is coordinating with a qualified intermediary. Under IRS rules for a 1031 exchange, the exchanger must identify the replacement property within how many days of closing on the relinquished property?
Correct Answer
B) 45 calendar days
Under IRC §1031 and Treasury Regulations, the exchanger must identify potential replacement properties within 45 calendar days of closing on the relinquished property. The identification must be in writing and signed by the exchanger. The exchanger then has a total of 180 days from the sale to complete the acquisition of the replacement property.
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