1031 Exchange Spanning Two Tax Years

A 1031 Exchange started in the second half of the year will span across two tax years should the full exchange period be utilized. For 1031 Exchanges whose 45 day identification or 180 exchange period start in one tax year, but does not expire until the next tax year, there are special considerations.

Under the rules the gains for any or all of the unused up exchange funds, can be reported as part of the tax filing for the subsequent year, this is the default reporting position.  If an Exchanger wishes to report the gain for the year of sale, such as using up offsetting deductions for the first year, that can be done as an election.

Gain a better understanding of the considerations for a 1031 Exchange that will span across two tax years.