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Delayed Exchange

A delayed exchange is the most common 1031 structure: the relinquished property sells first and the replacement is acquired within the 45/180-day deadlines.

In a delayed exchange the investor sells first, and a qualified intermediary holds the proceeds until the replacement property closes. The investor never has access to the funds in between. This structure gives time to find a replacement property, but the 45-day identification and 180-day closing deadlines are firm. Because most 1031 exchanges are structured this way, it is the default model for NNN buyers who are selling an existing investment property.

Related Terms

1031 Exchanges

Reverse Exchange

A 1031 exchange in which the replacement property is acquired before the relinquished property sells.

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1031 Exchanges

180-Day Exchange Period

The deadline to close on replacement property — 180 days from the relinquished sale or the tax-return due date, whichever comes first.

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