We frequently deal with nationwide exchanges. Everything is handled solely by our firm whether you are exchanging within the state of Alabama, outside of Alabama, or exchanging across states.

The exchange fails entirely. If no replacement property is identified within 45 days of your sale, 100% of your realized gain must be recognized. There are no extensions for missing this deadline absent a federally declared disaster.

You defer gain only to the extent you reinvest. The portion of net proceeds you do not reinvest — called "boot" — is taxable. For example, if you sold for $400,000 and only acquired $350,000 in replacement property, you would recognize $50,000 of gain.

The entity that owns the relinquished property must conduct the exchange and take title to the replacement property. Individual partners or members generally cannot exchange "their share" of partnership proceeds unless the property is first distributed to them — and even then, the timing and structure must be handled carefully. Contact us to discuss your specific situation.

As a general rule, acquiring replacement property from a related party (spouse, child, parent, or entity you control) while selling to an unrelated buyer will cause the IRS to treat the exchange as immediately taxable. There are limited exceptions, but this structure requires careful analysis before proceeding.

The exchange period ends on the earlier of 180 days after your sale or the due date of your tax return for the year of sale. For individual taxpayers who sell in December, the exchange period typically ends April 15 of the following year — roughly two months earlier than the full 180 days. Filing for an extension of your tax return extends the exchange period accordingly.

"Boot" is anything received in an exchange that is not like-kind real property — cash, debt relief in excess of debt assumed, a promissory note from a buyer, etc. Boot is taxable to the extent of your realized gain. Structuring your exchange to minimize or eliminate boot is one of the primary goals of the exchange process.

Only if the property qualifies as investment property rather than a personal-use residence. The IRS has a safe harbor (Rev. Proc. 2008-16) for vacation or second homes: the property must have been rented at fair market value for at least 14 days per year, and your personal use must not exceed 14 days per year (or 10% of rental days), for at least 24 months before the exchange. If the property has been treated as a personal residence — including deducting the mortgage interest as qualified home mortgage interest — it is unlikely to qualify.