180-Day Exchange Closing Period
From the date of closing on your relinquished property, you have 180 days to close, or get into title, on your replacement property. The property that you choose as your replacement must be one that was identified on your final 45-day form. Should you decide to purchase a property that was not identified, the exchange will no longer be valid and you're going to have a bad day. Additionally, the title on the replacement property must mirror the title on the relinquished property, meaning whoever was the taxpayer that was on title to the old property must be the same taxpayer to take title to the new property.
When preparing to close on your replacement property, your QI will prepare all legal documentation and work with all parties involved so everyone is aware that this property is being documented as part of a 1031 Exchange. When it is time to close, all exchange funds from the sale of the relinquished property that was held by the QI will be wired to the title agent handling the closing to be used for the purchase of the replacement property.
This part of the exchange must be completed within the 180 days. Should you close on day 181, the IRS will no longer accept your transaction as part a 1031 exchange, and you are going to have a bad day as it will be toast!