Written By:
Louis A. Tucci Managing Director L. Tucci Financial LLC Before we dive into the misconception of the 180-day rule, let’s review a few IRS requirements for a successful 1031 exchange. Understanding the Definition of “Closing” Legally, a “closing” is a final transaction between a property buyer and the seller. This means that all agreements are finalized, and paperwork is signed and exchanged. The seller receives their money during the closing process, and the buyer receives title to the property. Once everything is signed, the transaction is both binding and irrevocable. All these requirements must be met to qualify as an official “closing” for a 1031 exchange. 45 - Day Rule & 180- Day Rule These are critical deadlines. Both are considered hard deadlines with no exceptions or extensions. It is essential to understand the details thoroughly. What is the 45-Day Rule? It is the time to identify a property as a replacement without exception within 45 days or less after closing on your relinquished property or properties. What is the 180 - Day Rule? The 1031 exchange is governed by Section 1031 of the U.S. tax code. The code explains the steps you must take to complete the exchange. The 180 - Rule states an investor must close on their replacement property 180 days from the day they closed on their relinquished property. The 180 days includes holidays and weekends. So, if the 180th day falls on either a weekend or Holiday you’ll need to plan accordingly. The 180 day-rule is set in stone. Or READ MORE CIANJ member, Louis Tucci, currently serves as the Managing Director at L. Tucci Financial LLC. Using his business experience, Louis endeavors to help others achieve their financial independence. He can be reached at 201-291-2672 or [email protected] Disclosure: Louis A. Tucci is a Registered Representative of Coastal Equities, Inc. and an Investment Advisory Representative of Coastal Investment Advisors, Inc. Neither Coastal Equities, Inc. nor Coastal Investment Advisors, Inc. is affiliated with L. Tucci Financial, LLC. Investment Advisory Services are offered through Coastal Investment Advisors, Inc., and securities are offered through Coastal Equities, Inc., Member FINRA/SIPC, co-located at 1201 N. Orange St., Suite 729, Wilmington, DE 19801. Coastal and CoastalOne are trade names for the Coastal Companies. The Coastal Companies are Coastal Equities, Inc. Coastal Investment Advisors, Inc. a US SEC Registered Investment Adviser and Coastal Insurance Services, which consist of several affiliated insurance agencies, co-located at 1201 N Orange St., Suite 729 Wilmington DE 19801
0 Comments
Leave a Reply. |
Guest Blog
Archives
October 2024
Categories |