1031 Exchange Timeline for Scottsdale Investors
If you are selling an investment condo in Old Town Scottsdale or a single-family rental in nearby markets and want to defer capital gains, timing is everything. The 1031 exchange clock runs fast, and small missteps can cost you real money. In this guide, you will learn the 45 and 180 day deadlines, smart identification strategies, who does what, and how to coordinate condo HOA timelines and lender steps so you close on time. Let’s dive in.
A 1031 exchange lets you defer capital gains tax when you reinvest proceeds from the sale of investment real estate into other investment real estate that is like-kind. For legal definitions and current rules, review the IRS guidance on like-kind exchanges.
You have 45 calendar days from the date you transfer your relinquished property to identify replacement property in writing. Your identification must be explicit, signed, dated, and delivered to your qualified intermediary by day 45. Late or vague identifications can invalidate the exchange.
You must receive title and close on the replacement property within 180 calendar days after the transfer of your relinquished property. In some cases, your tax return due date can shorten this window. Confirm specifics with your CPA and review the IRS rules.
Both clocks start on the calendar day your sale closes and records. Listing or going under contract does not start the countdown. Day 0 is the recording date of your sale.
Most U.S. real property held for investment or business use is like-kind to other U.S. real property. That means you can exchange an investment condo for a single-family rental if both are held for investment. Primary residences do not qualify.
In a deferred exchange, you cannot have constructive receipt of sale proceeds. A qualified intermediary holds your proceeds, prepares exchange documentation, accepts your identification, and issues funds to escrow at replacement closing. For best practices and definitions, the Federation of Exchange Accommodators provides helpful references.
Deliver your signed identification list to your qualified intermediary on or before day 45. You can add or swap candidates until day 45. After day 45, your list is locked. You can only close on properties that were identified on time.
You select properties to identify and authorize instructions to the QI. You also coordinate with your CPA on tax questions, including depreciation recapture and any cash or mortgage boot.
Your agent shops and negotiates properties with timelines that protect your exchange. They share documents with your QI and title, and they help confirm recording dates.
The QI prepares exchange documents, holds funds, receives your identification notice, assigns contracts if needed, and instructs escrow for replacement closings. They are separate from you and cannot be your usual agent who handles funds.
Your CPA estimates gain, advises on boot and holding periods, and prepares tax reporting on Form 8824. Your lender provides preapproval and coordinates appraisal and closing timelines to fit the 180-day window.
Title confirms chain of title, prepares settlement statements with the QI as payee or instructee, and coordinates recording. Early communication reduces last-minute issues.
Use an attorney when you consider reverse or improvement exchanges or when related-party issues arise. These structures have added rules and documentation.
Luxury condos in Old Town Scottsdale are often limited. Winter can be a busy season for closings. Build backups into your identification list so you can pivot if a unit goes under contract.
Condo document delivery, estoppels, and clearance letters can add days. Request documents early and factor potential special assessments into your underwriting.
Underwriting and appraisal can take weeks. Choose a lender familiar with 1031 buyers and disclose your 45 and 180 day deadlines at preapproval.
Work with local title teams who understand county recording practices and standard fees. Arizona does not impose a statewide real estate transfer tax. Always verify your final closing costs with your title company.
If the right Scottsdale condo appears before your sale closes, a reverse exchange can help you buy first and sell later. An accommodation titleholder may take title temporarily. These exchanges are more complex and require experienced QIs and counsel.
If you plan to use exchange funds to renovate a condo or single-family rental, consider an improvement exchange. Improvements must be completed within the 180 day period, and draws and title structure require careful coordination with your QI.
A coordinated local network can save days and reduce risk. Look for a QI experienced with Arizona exchanges, title officers who understand condo documents and county recording, lenders who underwrite 1031 buyers, and property managers familiar with Old Town Scottsdale condos and Maricopa single-family rentals. The right team moves quickly, anticipates HOA and appraisal timelines, and keeps your 45 and 180 day targets on track. For additional background, NAR’s overview on 1031 like-kind exchanges is a useful primer.
If you are ready to map your 45/180 plan, we can coordinate search, negotiations, and local partners to fit your exchange timeline. Connect with The Phil Tibi Group to get started.
Our personal touch and transparency are how we plan to make you feel comfortable at every step of the home buying or selling process. We’re proud of our team and we try and show them off whenever we can. Contact us today so he can guide you through the buying and selling process.
