What is a 1031 exchange?

A 1031 exchange (named after Section 1031 of the IRS code) lets a real estate investor sell an investment property and reinvest the proceeds into a like-kind investment property while deferring federal and state capital-gains tax and depreciation recapture. The tax is deferred, not erased — it carries into the new property's basis.

What are the 1031 exchange deadlines?

Two hard clocks both start the day you close the sale of the relinquished property: you have 45 calendar days to formally identify replacement properties, and 180 calendar days to close on the replacement. Both deadlines are strict and cannot be extended for weekends or holidays.

Can I do a 1031 exchange in New Jersey?

Yes. New Jersey conforms to the federal 1031 rules, so a properly structured exchange defers both federal capital-gains tax and New Jersey state income tax on the gain. A Qualified Intermediary must hold the proceeds — you cannot take possession of the cash.

Investor Tools

1031
Exchange

Sell an investment property and roll the proceeds into another — deferring capital-gains tax and depreciation recapture. Here are the two deadlines that govern every exchange, and an estimate of what you'd defer.

A 1031 exchange (IRS Section 1031) lets a real-estate investor defer the tax due on a sale by reinvesting into a like-kind investment property. The tax isn't erased — it rolls into the basis of the new property — but deferring it keeps far more of your equity working. Two strict clocks start the day your sale closes.

Your two deadlines

Enter the day your sale (the relinquished property) closes. Both clocks run on calendar days and don't extend for weekends or holidays.

Closing date of your sale

Day 45 — Identify

—

Deadline to formally identify your replacement property(ies) in writing to your Qualified Intermediary.

Day 180 — Close

—

Deadline to complete the purchase of the replacement property and finish the exchange.

Time remaining

—

days to identify / to close

Sale closes—

Identify by (Day 45)—

Close by (Day 180)—

A Qualified Intermediary (QI) must hold the sale proceeds — if the cash touches your hands, the exchange fails. Line these dates up before you list. We can introduce you to a QI we trust.

Estimate the tax you'd defer

A rough sense of the federal + NJ tax a successful exchange would push down the road instead of paying now.

Sale price

Selling costs (commission, fees)

Adjusted cost basis (purchase + improvements − depreciation)

Accumulated depreciation taken (taxed at 25% if not deferred)

Federal cap-gains rate

NJ state rate

Include the 3.8% Net Investment Income Tax (most higher-income investors)

Tax you could defer

kept working instead of paid now

Total gain$0

Depreciation recapture (25%)$0

Federal cap-gains + NIIT$0

NJ state tax$0

Total deferred$0

Estimate only — not tax or legal advice. Actual liability depends on your bracket, holding period, prior losses, and state specifics; a 1031 exchange must be structured with a Qualified Intermediary and reviewed by your CPA. Rates above are editable.

The core rules

Like-kind, investment use. Both properties must be held for investment or business use — your primary home doesn't qualify.
Same taxpayer. The title holder who sells must be the one who buys the replacement.
Equal or greater. To defer all tax, buy replacement(s) of equal or greater value and reinvest all the equity (and replace the debt).
Qualified Intermediary required. A QI must hold the proceeds between the sale and purchase — you can't take the cash.
45 / 180 days. Identify in 45 days, close in 180 — both from the sale closing, no extensions.

Thinking about an exchange?

Timing is everything with a 1031 — the deadlines start the day you close. We'll help you line up the replacement search and a Qualified Intermediary before you list.

Talk Through Your Exchange →