05/29/2026
The difference between a successful §1031 Exchange and a fully taxable sale is often measured in days—not dollars.
Missing either the 45-day identification deadline or the exchange period causes the entire transaction to revert to a taxable sale. Don't miss it. That means:
Capital gains tax due on appreciation.
Depreciation recapture taxed at 25%.
Possible state income tax.
Loss of liquidity from the unexpected tax hit.
Example: If you sold a $1.2 million property with a $600,000 gain, missing the deadline could create a six-figure tax bill—potentially 30–40% or more tax depending on state and federal rates.