The 1031 Exchange Timeline Explained

The 1031 exchange timeline in California starts the day you sell your relinquished property, giving you 45 days to identify replacement options and 180 days total to close the deal, allowing deferral of capital gains taxes. For Los Angeles investors, these IRS deadlines are strict, with no extensions except in disasters, and California requires ongoing reporting of deferred gains. Using a Qualified Intermediary ensures compliance while exploring DSTs for passive reinvestment.

Understanding the Core Deadlines

The clock starts ticking at closing on your sold property.

• Day 1: Sale closes.

• By Day 45: Identify properties in writing to your Qualified Intermediary (QI).

You can identify up to three properties or more under the “200% rule” (total value ≤ 200% of sold property).

Step-by-Step Timeline Breakdown

• Days 1–45: Identification Period — List potential replacements; you can revoke or change selections before the deadline.

• Days 46–180: Exchange Period — Acquire the property; QI releases funds.

• Post-Exchange: File IRS Form 8824 and CA FTB Form 3840.

Checklist:

• Engage QI pre-sale.

• Track calendar days (weekends count).

• Prepare for possible disaster-related extensions in California.

California-Specific Rules and Extensions

• CA mandates a two-year holding period for related-party exchanges.

• In LA’s fast-moving market, competitive inventory can make timelines feel even tighter.

Case Study:

A Silver Lake owner sold in January 2025, identified replacement properties by mid-February, and closed in May—deferring taxes while benefiting from an IRS storm-related extension.

Tips to Stay on Track

• Use apps or calendar alerts for every deadline.

• Pre-vet properties before your sale to avoid delays.

Have questions about 1031 exchanges or DST investments in Los Angeles? The Borges Real Estate Team has helped investors successfully defer taxes and grow their portfolios. Let’s talk.