1031 Tax-Deferred Exchanges

2 O’Clock Title Company supports investors using §1031 tax-deferred exchanges by coordinating your closing with First American Exchange Company (FAEC), a nationally recognized Qualified Intermediary (QI).

We are not a QI, but as a First American Title agent we can seamlessly connect you with FAEC and ensure your settlement documents and timing work properly with your exchange structure.

WHAT IS A 1031 EXCHANGE?

A 1031 exchange allows investors to defer capital gains taxes when exchanging real property held for investment or for productive use in a trade or business for like-kind replacement property.

- The transaction must be structured as an exchange, not a sale.

- A Qualified Intermediary must hold the proceeds and assign the contracts before closing. 

- Replacement property must be “like-kind,” which is broadly interpreted for real estate. 

- The same taxpayer must sell and buy. 

- Both properties must be held for investment or business use.  

1031 EXCHANGE TIMELINES

1. The 45-Day Identification Period

The 45-day clock starts the day your relinquished property closes.

By midnight on day 45, the investor must identify replacement property in writing and deliver that identification to the Qualified Intermediary.

Identification must follow the IRS rules (such as the 3-Property Rule, 200% Rule, or 95% Rule.) 

2. The 180-Day Exchange Period

The entire exchange must be completed within 180 days from the closing of the relinquished property.

This 180-day period runs concurrent with the 45-day identification window, it does not start after the 45 days end.

Replacement property must be acquired (closed and title transferred) within this 180-day period, or by the taxpayer’s tax-return due date (including extensions), whichever comes first. 

Why These Deadlines Matter

Because settlement dates, lender requirements, and contract contingencies can affect the overall timeline, coordinating early with the Qualified Intermediary, CPA, and closing agent helps avoid delays that could affect the investor’s eligibility for tax-deferral treatment.

HOW WE HELP

As part of your Virginia settlement, we can:

Coordinate with First American Exchange Company to open your 1031 exchange.

Ensure proper assignment language is added to the contract and closing documents.

Work with your CPA, attorney, and FAEC representative during the transaction.

Provide accurate title work and timely closings that meet the 45-day identification and 180-day acquisition timelines.

WHY WORK WITH FAEC THROUGH A FIRST AMERICAN AGENT?

FAEC is a nationwide Qualified Intermediary backed by First American.

Exchange funds are held under FAEC’s QI custodial processes.