If, during the exchange period, a Federally-declared Disaster Area is declared where the relinquished property is located, it may be possible to get time extensions. Otherwise, if the timing of the contemplated transaction is not in the proper order or cannot be done within the timeframes above, it may be wise to consider the benefits of executing a reverse exchange strategy.
Tax deferred exchange transactions must be executed in a proper order. You must sell what you have, before you can buy what you want. The sale of the relinquished property (the property being sold) initiates both the identification period and the acquisition timelines for these transactions. Both timeframes have the same beginning date which is the day after the relinquished property was sold. (See the video here.) The two time frames are:
Until midnight on the 45th day following the relinquished closing to identify suitable replacement property.
Taxpayer has 180 days following the relinquished closing (or the date their tax return is due, whichever comes first) to acquire the replacement property(s)
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