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The Exchange Process

The 1031 Exchange Process, Step by Step

Two hard deadlines. One dedicated intermediary. Here is exactly what happens.

A 1031 exchange is not complicated — but it is time-sensitive. Miss the 45-day or 180-day deadline and the exchange fails. Prospect Exchange tracks every date, coordinates every transfer, and keeps you informed at every stage.

Start an ExchangeSee Key Rules

Exchange Timeline

Three phases. Two hard deadlines.

Prospect coordinates the paperwork, funds, and reminders from sale closing through replacement-property closing.

45 days to identify180 days to close
Step 1Closing

Close with your QI already in place.

Before the sale closes, Prospect prepares the exchange agreement and coordinates with the closing agent so proceeds move directly into a segregated exchange account.

  • Funds never pass through your hands.
  • Exchange documents are prepared before closing.
  • Closing agent receives clear wiring instructions.

Your exchange clock starts the moment the sale closes.

Calculate Your DatesTalk to an Advisor

Why It Matters

The Role of the Qualified Intermediary

Start an Exchange
Client signing 1031 exchange documents with Prospect Exchange

Key Rules at a Glance

The five rules every 1031 exchangor must know.

Key 1031 Exchange Rules — deadlines, property requirements, and eligibility
RuleWhat It Means
45 Days45-Day Identification Deadline

Calendar days from relinquished property closing. No exceptions. Weekends and holidays do not extend it.

180 Days180-Day Exchange Deadline

Calendar days from relinquished property closing, or your tax return due date (with extensions), whichever is earlier.

Like-KindLike-Kind Requirement

Both properties must be held for investment or productive use in a trade or business. Most U.S. real estate qualifies.

Equal or UpEqual or Up Requirement

To defer all capital gains, purchase a replacement property of equal or greater value and reinvest all net equity.

Investment OnlyNo Personal Use

Your primary residence does not qualify. Vacation homes may qualify with careful planning.

Read the FAQ

Rules summarized for general guidance. Always confirm your specific situation with a qualified tax professional.