Timing can make or break your 1031 exchange. If you are selling in Far North Dallas or anywhere in the Dallas–Plano–Irving area, the federal deadlines arrive fast while lenders, title work and competition for good properties add pressure. You want a simple timeline you can trust and a plan that fits how deals actually close in DFW. In this guide, you will learn the key 45- and 180-day rules, how they line up with local closing speeds, and the step-by-step moves to finish on time. Let’s dive in.
1031 timelines at a glance
The federal rules are simple to state and strict to follow. A like-kind exchange under Section 1031 hinges on two hard deadlines tied to the date you transfer your relinquished property.
- You have 45 calendar days to identify your replacement property or properties in writing and deliver that identification to your qualified intermediary (QI).
- You have 180 calendar days to acquire the replacement property and receive title, or until your tax return due date for that year if it comes sooner.
Count calendar days, not business days. Weekends and holidays count. The clocks start the day after your sale transfers. These deadlines are not extendable except for the narrow tax return due date rule.
The 45-day identification rule
Your identification must be unambiguous and in writing. List addresses or legal descriptions and submit the notice to your QI on time. Plan to deliver identification well before day 45. Verbal notes or emails to your agent are not enough if they do not meet the written delivery requirement to the QI.
The 180-day completion rule
You must close and take title to the replacement property within 180 days of the day after your sale. Work backward from that date. Leave room for appraisal, underwriting, title clearing, survey, insurance and any required repairs that a lender might condition.
How many properties you can identify
You must follow one of these three tests:
- Three-property rule: identify up to three properties, any value.
- 200% rule: identify any number of properties if their total value does not exceed 200% of your relinquished property’s value.
- 95% exception: identify any number and acquire at least 95% of the total value identified.
Pick one method and follow it exactly.
Boot and debt replacement basics
Cash you receive or non–like-kind property is taxable “boot.” A shortfall in debt on your replacement compared to your relinquished property can also create taxable mortgage boot. To fully defer tax, acquire equal or greater value and replace debt with new debt or additional cash.
Reporting the exchange
After you finish, report the exchange on IRS Form 8824 with your tax return for the year of the exchange. Keep your QI documents and closing statements organized for your records.
How timing works in Far North Dallas
DFW deal flow moves quickly, but financing, title and due diligence still take time. Here is how the federal deadlines meet typical local closing ranges.
- Residential investment properties: cash deals can close in roughly 7 to 14 days. Financed purchases commonly take about 30 to 45 days based on lender underwriting and appraisal.
- Small commercial or small multifamily: often 45 to 90-plus days due to ALTA surveys, environmental reviews and lender requirements.
- New or complex commercial: may require longer timelines that rarely fit into 180 days without advance planning.
What this means for you: the 45-day identification period can pass before you complete full tours and inspections, especially if you face multiple offers. Start your search early. Use conservative identification strategies, and be ready to write offers with targeted due diligence windows that align with your exchange.
Special structures when the market moves fast
Reverse exchanges
When you find the right property first, a reverse exchange lets an Exchange Accommodation Titleholder (EAT) acquire and hold the replacement while you dispose of the relinquished property within the allowed period. Reverse exchanges are more complex and costlier, and the 180-day limit still applies. They require a specialized accommodator and coordination with lenders and title companies that are comfortable with the structure.
Improvement exchanges
If your plan is to acquire and improve a property using exchange funds, consider an improvement exchange. Improvements must be completed within the 180-day window. In the Dallas–Plano–Irving area, permitting can add time, so set realistic construction schedules.
Financing and underwriting timelines
Underwriting, appraisal and repair conditions can consume weeks. Engage lenders early. Lock milestones that fit inside 180 days and leave buffer time for title updates, surveys and insurance approvals.
Delaware Statutory Trusts (DSTs)
DST offerings can help you meet deadlines when a suitable direct property is hard to secure in time. These are passive, fractional options commonly used by DFW investors to complete exchanges quickly. Confirm your eligibility and the sponsor’s funding window before day 45.
Title and local due diligence
Title searches in Dallas, Collin and Denton counties can surface easements, tax liens or judgments that delay closing. Order title commitments early. Check for flood zone issues and any city permitting items that could affect improvement timelines.
Step-by-step checklist you can follow
Before you list or sign a sale contract
- Engage a qualified intermediary and sign exchange documents before closing.
- Coordinate with your CPA or tax attorney about debt replacement and potential boot.
- Prepare contract language that allows assignment to your QI and gives clear escrow instructions.
At sale contract and closing
- Confirm the deed transfer date. That date triggers your 45- and 180-day clocks.
- Ensure sale proceeds go directly to the QI, not to you, for a forward exchange.
During the 45-day identification window
- Deliver written identification to your QI by the deadline with clear property details.
- Choose your identification strategy: three-property, 200% rule, or 95% exception.
- Keep your property search active and negotiate offers that respect the 1031 timing.
Between identification and the 180-day deadline
- Complete inspections, due diligence, and final contract terms.
- Keep lender appraisal and underwriting on a tight schedule.
- If doing a reverse or improvement exchange, coordinate payments, EAT timing and permits with the accommodator.
After the exchange
- File Form 8824 with your tax return for the year of the exchange.
- Retain all QI statements and closing documents.
Sample North Dallas timeline scenarios
- Scenario A: You sell a rental on April 1. Your identification window runs from April 2 through day 45. Your acquisition window runs from April 2 through day 180. Aim to identify well before day 45 and have financing lined up to close comfortably before day 180.
- Scenario B: You sell and buy on the same day with cash. A simultaneous exchange can work if the QI receives funds and titles flow correctly through escrow.
- Scenario C: Inventory is tight and you find the right duplex first. You set up a reverse exchange with an accommodator to hold title to the replacement, then dispose of your relinquished property within the allowed period.
Common pitfalls to avoid
- Missing the 45-day identification deadline. There is no extension under normal rules.
- Engaging the QI too late, which risks funds being disbursed to you and invalidating the exchange.
- Relying on verbal or incomplete identification. It must be written and delivered to the QI.
- Underestimating lender timelines for appraisal and underwriting.
- Failing to replace debt, which can create taxable mortgage boot.
- Using vendors without reverse or improvement exchange experience when those structures are required.
Your North Dallas 1031 team
You will move faster and with fewer surprises when you assemble the right people early:
- Qualified Intermediary with forward, reverse and improvement expertise
- CPA or tax attorney with 1031 experience
- Local real estate adviser experienced with 1031 mechanics and DFW submarkets
- Lender who understands exchange timing
- Title and escrow professionals familiar with Dallas and Collin County processes
If you want a fiduciary partner to coordinate the moving parts, align timelines with real DFW closing speeds, and surface quality replacement options across the Tollway corridor, connect with the Private Client team at Edwin Jones. We bring portfolio-level advisory, no dual agency, and disciplined execution to help you complete your exchange on time and with confidence.
FAQs
When does the 1031 timeline clock start?
- The clock starts the day after the deed transfers on your relinquished property. That date triggers both the 45-day identification window and the 180-day completion period.
Do weekends and holidays count toward the deadlines?
- Yes. You count calendar days. Weekends and holidays are included in both the 45- and 180-day counts.
Can I identify more than three properties in North Dallas?
- Yes. You can use the 200% rule to identify more than three as long as the total value does not exceed 200% of what you sold, or use the 95% exception if you will acquire at least 95% of the value identified.
What happens if I miss the 45-day identification deadline?
- You generally cannot complete a tax-deferred exchange for that sale if you miss the 45-day window. Plan ahead and deliver identification to your QI early.
Can I close both the sale and purchase on the same day?
- Yes. A simultaneous closing can qualify if a QI is in place and funds and title are routed properly through escrow within the exchange structure.
How does Texas tax treatment affect my 1031 exchange?
- Texas does not impose a state individual income tax. Section 1031 is a federal deferral, so consult your tax advisor if you have multistate holdings or reside outside Texas.
What if I cannot replace all the debt on my replacement property?
- A shortfall can create taxable mortgage boot. You can avoid boot by replacing debt with new financing or adding additional cash so the replacement value and debt match or exceed what you relinquished.
Is a reverse exchange the best fix when inventory is tight?
- Not always. Reverse exchanges can solve sequencing issues but add cost and complexity. Evaluate the benefits with a qualified accommodator and your tax advisor before proceeding.
