Fourth Quarter 1031 Tip
If you are a calendar year taxpayer and you begin a 1031 Exchange during the 4th quarter of 2016, your 180 day deadline for completing the exchange will fall in 2017 — the next tax year. Timing is crucial for your tax reporting. To properly report a successful 1031 Exchange, both the property you sell and the property you buy must be reported on the SAME tax return.
Bottom line—taxpayers should not file a 2016 tax return until all purchases in the 1031 Exchange are made and the 1031 Exchange is completed. To allow for this timing, it may be necessary to file an extension on your 2016 tax return (IRS Form 4868). Contact IPX1031® for more information.