RentalCalcs / working records
1031 exchange: deadlines and funding
Record both deadlines before committing to a replacement. Then reconcile where every purchase dollar comes from and how much gain carries into the new basis.
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Illustration assumptions. Hypothetical US federal delayed exchange of qualifying real property. Sale closes November 20, 2026. Assume a return due date of April 15, 2027 before extension. The funding example excludes exchange costs, personal property, Section 1245 recapture and other basis adjustments.
Example and your records
Item and method
Hypothetical example
Your records
Relinquished sale closesUse the actual transfer date
ExampleNovember 20, 2026
Your records
Day 45: written identification45 calendar days after closing
ExampleJanuary 4, 2027
Your records
Day 180: outer acquisition limit180 calendar days after closing
ExampleMay 19, 2027
Your records
Return due date before extensionConfirm taxpayer type, tax year and any relief
ExampleApril 15, 2027 (assumed)
Your records
Acquisition deadline without extensionEarlier of the return deadline or day 180
ExampleApril 15, 2027
Your records
Deadline with valid extension past day 180The return extension does not extend day 180
ExampleMay 19, 2027
Your records
Amount realized after selling costs$500,000 gross price − $30,000 selling costs
Example$470,000
Your records
Old adjusted basis / realized gainGain = $470,000 − $220,000
Example$220,000 / $250,000
Your records
Old debt paid / QI proceedsQI proceeds = $470,000 − $150,000
Example$150,000 / $320,000
Your records
Replacement priceSame-value real-property replacement
Example$470,000
Your records
Funding: QI / new loan / outside cashSources total the $470,000 price
Example$320,000 / $100,000 / $50,000
Your records
Recognized gain / deferred gainSimplified fully deferred scenario
Example$0 / $250,000
Your records
Replacement basis$470,000 price − $250,000 deferred gain
Example$220,000
Your records
Before using the result
- The smaller new loan does not by itself force recognition here: $50,000 of outside cash replaces the $50,000 debt reduction. Verify the full Form 8824 calculation with the preparer.
- For comparison, a $420,000 purchase funded with $270,000 QI proceeds and $150,000 debt returns $50,000 cash boot. In this simplified example, $50,000 gain is recognized, $200,000 deferred and replacement basis is $220,000.
- Arrange the QI before closing. Confirm signed identification delivery, permitted recipient, taxpayer continuity, real-property eligibility and the actual return due date. Specific disaster relief requires separate verification.