1031 Exchange: The Investor's Guide

A 1031 exchange lets investors defer capital gains tax by rolling proceeds from one investment property into another. Miss a deadline and the entire deferral collapses — this guide covers the mechanics.

The critical timelines

Two hard deadlines govern every 1031.

• 45 days to formally identify replacement property(ies)
• 180 days from sale closing to close replacement
• Qualified intermediary must hold proceeds — you cannot touch them
• Like-kind = any real property held for investment or business use
• Replacement price must equal or exceed relinquished price

Financing the replacement property

DSCR and conventional investor loans both work for the replacement leg. Line up your lender before day 45 so the loan can close inside the 180-day window.

Frequently asked questions

Can I 1031 into a different asset class?

Yes. Like-kind is broad for real estate — you can exchange a rental house into a small multifamily, land, or DST interest.

What happens if I miss the 45-day deadline?

The exchange fails and the full capital gain becomes taxable in the year of sale. There are no extensions except in federally declared disasters.

Apply now · Talk to a loan advisor

https://gelitecapital.com/resources/guides/1031-exchange-guide