Safe Harbor Exchange, Inc.
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Exchange Timeline
Click on an element to learn more, or scroll down to learn more about the Designation Timeline in chronological order.
Getting Started
To qualify for an IRC ยง1031 Exchange, the property being relinquished must be investment real estate property- with the intent to replace said property with another real estate investment property (*like-kind).
To set up an exchange, the exchanger must enlist the services of a Qualified Intermediary (QI) prior to the close of their sale property (Relinquished property).
Once the QI has been selected, they must be placed in contact with the Relinquished property's closing officer in order to collect items to construct the Exchange documents.
*Like-kind refers to the properties involved in the exchange being real estate investment for real-estate investment.
Pre-Exchange Period
Day 1
the day after the sale's close
Identification Period
45 Day Identification Period
This period is concurrent with the 180 days of the exchange.
Once their exchange has commenced, the exchanger should be searching for viable replacement/ replacements to designate to their QI- if they have not been doing so already.
When Identifying/ Designating property, these three rules apply towards the listing process:
- The property must be unambiguously described
- Submission/s must be in writing
- The Qualified Intermediary must be notified about every designation.
Identification Rules
These rules are also described in further detail on our Designation Notice.
- Three Property Rule: The exchanger identifies three properties of any value with the intent to buy at least one.
- 200% Rule: If the exchanger identifies more than three properties, the combined value of those properties cannot exceed 200% of the value of the Relinquished Property
- 95% Exception: If the exchanger identifies more than three properties, and the combined value of those properties exceed 200% of the value of the Relinquished Property, then they must acquire 95% of what was identified.
Day 45
Last day to Identify/ Amend Identification List
Note about Exchange Funds
At Day 0 (day of closing), the sale proceeds will be held by your QI indefinitely until either of the following:
- The expiration of your Identification Period
- The closing of your Replacement Property/ Properties
For further details/ clarification, please call our office.
Purchasing Period
The 135 days following the 45th day of the exchange is referred to as the purchasing period because the exchanger can only purchase at this time.
However, the exchanger may purchase their Replacement/ Replacements at any point throughout the exchange, so long as they have been properly Identified with the exchange coordinator.
Important Note
An exchange can expire on either of the following depending on whichever one comes first:
Its' 180th day
-OR-
The due date of the exchanger/taxpayer's tax return deadline (this includes any extensions, if applicable).
Day 180
Last day to close on Replacement property/ properties
