WHY ARE MOST 1031 EXCHANGES STRUCTURED AS DELAYED EXCHANGES?
• Delayed exchanges allow the exchanger additional time to find and close the purchase of replacement property. The replacement need not be identified or acquired when the relinquished property is sold. The exchanger can consider market opportunities rather than feel pressured to immediately identify and purchase all replacement property. A word of caution: the 45-day Identification period is probably the most difficult rule to come out the Final Regulations. We strongly suggest that exchange clients have several properties ready to identify as potential replacement properties before they close on their relinquished property. Otherwise, the exchangers may learn to their dismay, just how rapidly forty-five days can disappear. • As a practical matter, it is often extremely difficult to coordinate concurrent closing, especially if the relinquished and replacement property transactions are effected in different counties and states. For example, funds from the sale of the relinquished prope
