1031 Exchange Deadlines: 45 Days and 180 Days Explained
A 1031 exchange remains one of the most effective ways to defer capital gains taxes when selling investment real estate. By reinvesting the proceeds into another like-kind property, investors preserve more capital and keep their wealth working. What often surprises people, however, is how strict the IRS timelines are. The deadlines leave little room for error, and missing one can eliminate all tax benefits.
For that reason, many investors rely on Delaware Statutory Trusts to simplify the process. DSTs provide ready-to-acquire properties and eliminate many of the obstacles that make 1031 exchanges stressful.
Understanding the Two Critical IRS Deadlines
A successful 1031 exchange hinges on meeting the identification and closing deadlines. These timelines are firm, and the IRS does not offer grace periods for weekends, holidays, or delays in your real estate transaction.
The 45-Day Identification Window
Once your relinquished property closes, the clock starts immediately. You have 45 calendar days to identify your potential replacement properties in writing. The IRS allows three methods for identification:
Three-Property Rule
You may identify up to three potential replacement properties, regardless of their combined value.
200% Rule
You may list more than three properties as long as the total fair market value does not exceed 200 percent of the value of the property you sold.
95% Rule
You may identify any number of properties, with the requirement that you ultimately acquire at least 95 percent of the total value identified.
There are no extensions for this deadline. Even one day late—even if the day falls on a holiday—invalidates the exchange.
The 180-Day Completion Window
In addition to identifying a replacement property, you must complete the acquisition within 180 calendar days of the sale of your relinquished property. This 180-day period includes the first 45 days, not an additional timeline.
Only certain federally declared disaster events may trigger deadline extensions, and those exceptions are rare. For nearly all investors, the 180-day deadline should be treated as absolute.
Why Many Investors Use DSTs to Meet 1031 Deadlines
Because 1031 exchanges require quick decisions and precise timing, DSTs have become a reliable option for investors seeking certainty and simplicity. A DST can be identified and acquired without the operational delays associated with traditional real estate purchases.
Ready-to-Acquire Structure
DST offerings are typically pre-packaged and available for immediate identification. This greatly reduces the pressure during the 45-day window.
Passive Income
Most DSTs invest in stable, long-term, triple-net lease properties. Investors receive passive income without managing tenants, repairs, or operations.
Full 1031 Tax Deferral
DSTs are structured to meet IRS requirements for like-kind property. This allows investors to maintain complete tax deferral.
Diversification Opportunities
Because DSTs often accept smaller minimum investments, they allow investors to diversify across multiple properties and regions—something that would be difficult to accomplish with a single replacement property.
How Medalist Helps Investors Navigate the Process
Medalist Holdings (NASDAQ: MDRR) specializes in 1031-friendly DST structures built around stability, simplicity, and income. Our offerings are designed to satisfy IRS requirements while supporting the long-term goals of investors who want passive real estate exposure.
What Medalist DSTs Offer
• Tax-deferred entry through a 1031 exchange
• Professionally managed, institutional-grade single-tenant net lease properties
• Predictable income streams
• Optional future conversion to OP Units through a 721 UPREIT election for estate planning
Our team guides investors through identification, closing, and long-term strategy, helping ensure that the entire process stays on track.
The Cost of Missing a Deadline
Failing to meet 1031 deadlines can have immediate financial consequences. Investors risk:
• Paying full capital gains taxes
• Triggering depreciation recapture
• Losing state tax deferral benefits
• Having reduced capital to reinvest
These outcomes can significantly reduce long-term wealth. Planning ahead is essential, especially when a sale is approaching or already underway.
Getting Started
If you are preparing to sell a property or are already in the midst of a 1031 exchange, now is the time to review your options. The 45-day window arrives quickly, and having a ready solution in place can prevent costly mistakes.
Medalist is available to help evaluate your goals, walk through DST options, and create a smooth path to tax-deferred, passive real estate ownership.
