How the deadlines work
A deferred 1031 exchange has two clocks, and both start the day you transfer the property you are giving up (the relinquished property). They run at the same time; the 45 days are not added to the 180.
- Identification period: ends at midnight on day 45. By then you must identify replacement property in a written document you sign and deliver to the seller or your qualified intermediary. Real estate is identified by legal description, street address or distinguishable name.
- Exchange period: ends at midnight on the earlier of day 180 or the due date of your tax return for the year of the transfer, including extensions. You must actually receive the replacement property by then.
The late-year trap
If you sell in the last few months of the year, day 180 falls after the usual April 15 due date. Example: you close on Monday, November 2, 2026.
- Identification deadline: Thursday, December 17, 2026 (day 45)
- Day 180: Saturday, May 1, 2027
- Return due date without an extension: Thursday, April 15, 2027
Because April 15 comes first, the exchange must finish by April 15 unless you extend the return. With an extension, the earlier date is day 180, May 1. The calculator flags this case and builds a calendar file with both deadlines and a 7-day reminder.
How boot and gain are estimated
Your realized gain is the sale price minus selling costs minus your adjusted basis. You are taxed now only on the boot, up to the realized gain. The tool counts two kinds, following the logic of Form 8824:
- Cash boot: exchange funds not spent on the replacement property.
- Mortgage boot: the old loan paid off minus the new loan and any cash you add. Cash you pay offsets debt relief; it does not offset cash you receive.
The rest of the gain is deferred, and your basis in the new property is its price minus the deferred gain.
Worked example: trading down
| Item | Amount |
|---|---|
| Sale price | $900,000 |
| Selling and exchange costs | $54,000 |
| Mortgage paid off | $300,000 |
| Exchange funds with the intermediary | $546,000 |
| Adjusted basis | $420,000 |
| Realized gain ($846,000 − $420,000) | $426,000 |
| Replacement price / new loan | $780,000 / $260,000 |
| Cash boot ($546,000 − $520,000 used) | $26,000 |
| Mortgage boot ($300,000 − $260,000) | $40,000 |
| Gain taxed now | $66,000 |
| Gain deferred | $360,000 |
| Basis in replacement ($780,000 − $360,000) | $420,000 |
To defer the full gain, the investor would need to buy property worth at least $846,000 and put all $546,000 of exchange funds into it. These are illustrative numbers.
Identification limits
Treasury Regulation 1.1031(k)-1(c)(4) caps how many replacement properties you can name:
- 3-property rule: up to three properties of any value.
- 200% rule: any number, if their combined value is no more than 200% of the property you gave up.
- 95% rule: if you exceed both, the identification still counts only if you receive at least 95% of the total value you identified.
What the tool leaves out
- Since 2018, only real property held for business or investment qualifies. Your home and property held mainly for resale do not.
- Recaptured depreciation, state taxes, related-party rules and reverse exchanges need a tax professional.
- You can't touch the sale proceeds. The IRS warns that taking control of the cash before the exchange is complete can make all the gain taxable.
What to do next
Read 1031 exchange basics. Find your adjusted basis with the rental depreciation calculator, and estimate what a taxable sale would cost with the depreciation recapture calculator.