Exchange Time Periods
There are two critical time periods for exchanges: the identification period and the exchange period. Both begin on the date the relinquished property is sold and run concurrently.
The identification period is 45 days. During this 45 day period replacement property must be designated or identified in writing. If replacement property is not identified within this 45 day period, the exchange fails and all gain realized from the sale of replacement property will be taxable.
The exchange must be completed within 180 days of the closing date for the relinquished property. This 180 day period runs concurrently with the 45 day designation period. It is not added to the end of the designation period. It is not possible to extend either the identification period or the exchange period.
If the exchanger files a tax return for the year of the exchange, the exchange period is terminated. If an exchange has not been completed by the date a tax return is due, a request for an extension of time to file the tax return must be filed in order to receive the entire 180 day period to complete an exchange.