If your 1031 exchange is not complete by the due date for your tax return, you may need to file for an extension.

The time frame you have to complete the acquisition of your replacement property ends at midnight on the earlier of: (a) the 180th day after the date you transferred the relinquished property; OR (b) the due date (including extensions) for your income tax return for the taxable year in which the transfer of the relinquished property occurs. (U.S. Treasury Regulations section 1.1031(k)-1(b)(2)).

This means, if your relinquished property sale closes after October 17, 2025, your 180th day deadline to acquire replacement property will fall after the common 2025 tax return due date of April 15, 2026. In order to receive the full 180-day period to acquire replacement property, you must file an application for extension of time with the IRS to extend the due date for your 2025 tax return. If you do not file for an extension, you will NOT be able to acquire any replacement property in your exchange after your tax return due date. Taxpayers may have different tax return due dates. Please consult with your tax advisor to determine your tax return due date, and whether you will need to file for an extension.

If you have any questions, please contact your tax advisor.