Purchase Your Replacement Property

Finalize Your 1031 Exchange

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You've sold your relinquished property and identified potential replacements—now it’s time for the final step: purchasing your replacement property. This is where your 1031 exchange comes full circle. But remember: this step is just as time-sensitive and compliance-driven as the others.

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The 180-Day Rule

 

From the day you close on your relinquished property, you have 180 calendar days to:

✅ Complete the purchase of one or more identified replacement properties
✅ Finalize the transaction through your Qualified Intermediary (QI)
✅ Ensure full compliance with IRS rules for tax deferral

 

Missing this deadline could disqualify the entire exchange and trigger capital gains taxes—so staying on track is critical.

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What to Expect When Purchasing the Replacement Property

1. Coordinate With Commonwealth1031.com LLC. We will prepare the exchange documents and wire the funds directly to the closing agent. You cannot take possession of the proceeds yourself.

2. Close on the Property. Once the deal is finalized, the replacement property must be deeded directly to you or your entity (LLC, trust, etc.)—not to Commonwealth1031.com LLC as your QI.

3. Maintain Compliance

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To defer 100% of your capital gains tax:

• The new property must be of equal or greater value

• All exchange proceeds must be fully reinvested

• The property must be for business or investment use

 

Pro Tips for a Smooth Closing

• Start Due Diligence Early: Perform inspections, title checks, and financing reviews well before the deadline.

• Stay in Constant Contact: Work closely with our office as your QI, the closing attorney, and real estate agent to avoid missteps or delays.

• Be Prepared to Act Fast: Competitive markets can move quickly—having backup properties identified can save your exchange.