The short answer
Yes, whenever the estate's Form 1041 for the year of the sale is due before day 180. Section 1031(a)(3) ends the exchange period at the earlier of the 180th day or the due date, including extensions, of the transferor's return for the year of the transfer, and when the estate is the seller that return is Form 1041. Two things the executor controls decide the answer: the estate's tax year, chosen on the first return and able to end on the last day of any month, and whether a Form 7004 is filed, which adds five and a half months. A trust that did not elect under section 645 is on a calendar year and has less room.
At a glance
| Exchange period ends | The earlier of day 180 or the due date, with extensions, of the seller's return for the year of transfer |
|---|---|
| Estate's return | Form 1041, due the 15th day of the fourth month after the estate's tax year ends |
| Estate's tax year | Chosen on the first Form 1041; the first year may be any period of 12 months or less ending on a month end |
| Extension | Form 7004 gives an automatic five-and-a-half-month extension to file, not to pay |
| Trusts | Generally must use a calendar year, so the return is due April 15 unless extended |
| Section 645 election | Lets a qualified revocable trust be treated as part of the estate and report on the estate's year |
| Estimated tax | An estate owes no estimated payments for tax years ending within two years of death |
The exchange period ends at the earlier of day 180 or the return due date, and for an estate that return is Form 1041
Section 1031(a)(3)(B) treats replacement property as not like-kind if received after the earlier of 180 days from the transfer or "the due date (determined with regard to extension)" of the transferor's return for the year of the transfer. Reg. section 1.1031(k)-1(b)(2) repeats the rule, and line 6 of the Instructions for Form 8824 applies the same test to the date received.
Individuals meet this rule as the reason a sale after mid-October needs a Form 4868, covered in filing an extension to keep the full 180 days. When the seller is an estate, the capping return is Form 1041, which the Instructions for Form 1041 make due "the 15th day of the 4th month following the close of the tax year". If the decedent sold during life and the estate is only finishing the purchase, the capping return is instead the decedent's final Form 1040, the case in what happens if the owner dies during a 1031 exchange.
The executor picks the estate's tax year on the first return, and that choice moves the due date
Publication 559 says the personal representative "chooses the estate's accounting period upon filing the first Form 1041", and that "the estate's first tax year can be any period that ends on the last day of a month and doesn't exceed 12 months". Choosing any month other than December adopts a fiscal year.
A trust, by contrast, "must adopt a calendar year" under the Form 1041 instructions, with narrow exceptions for exempt, charitable and grantor trusts, so a non-grantor trust that sells late in the year always faces an April 15 due date. An estate that has not yet filed can pick a year end that leaves day 180 inside the filing window; one that has already filed must plan the sale date around the due date already set, because changing an adopted accounting period is not a routine step.
Form 7004 adds five and a half months, but only if it is filed before the return and before the due date
The Instructions for Form 7004 grant an estate or trust filing Form 1041 "an automatic 5½-month extension of time to file", and require the form "on or before the due date of the applicable tax return". The extension moves the filing date only: Form 7004 "does not extend the time to pay any tax due", so if the exchange fails the estate owes the tax by the original date. The Form 1041 instructions do exempt an estate from estimated tax for any year ending within two years of the death, which removes the quarterly payments but not the final one.
File the extension even when the estate expects to close early. A return filed before the replacement closes ends the exchange period on that filing, because the due date is measured with extensions only if one was actually obtained.
Worked example: a sale in the estate's tenth month under two different year ends
Hypothetical, round numbers. The owner dies on June 10, 2026 and the estate sells a rental on March 15, 2027 through a qualified intermediary. Day 45 is April 29, 2027 and day 180 is September 11, 2027.
If the executor adopted a year ending May 31, the first Form 1041 covers June 10, 2026 to May 31, 2027 and is due September 15, 2027, four days after day 180, so the full period survives without an extension. If the executor adopted a year ending March 31, the first return is due July 15, 2027, and without Form 7004 the exchange period ends that day, 58 days early; with Form 7004 filed by July 15 the due date moves to the end of December and day 180 governs. Run your own calendar with the estate's CPA, since the first return may already have fixed the year.
- Sale: March 15, 2027. Day 45: April 29. Day 180: September 11.
- Year ending May 31: Form 1041 due September 15; the full 180 days survive.
- Year ending March 31: Form 1041 due July 15; the period is cut unless Form 7004 is filed first.
- Calendar-year trust selling the same day: return due April 15, 2028, so day 180 governs.
A revocable trust that made the section 645 election rides on the estate's year; one that did not is on a calendar year
Section 645 lets the executor and the trustee of a qualified revocable trust elect to treat the trust "as part of such estate (and not as a separate trust)" for income tax during the election period. Under Reg. section 1.645-1, with an executor appointed the electing trust reports on the estate's combined Form 1041 and so on the estate's year; with no executor, the trustee files as if the trust were an estate and may adopt a fiscal year. The election is made on Form 8855 by the due date of the estate's first Form 1041 with extensions, and is irrevocable.
A trust that does not elect keeps its calendar year, so a sale after mid-October needs a Form 7004 to keep the full 180 days. The trust's tax on a failed exchange is in how the gain is taxed if a trust sells the rental, the estate's in taxes when an estate sells a rental before distribution, and whether the stepped-up basis makes the exchange worth running at all in an executor selling an estate's rental.
Related questions
Which return reports the exchange if the sale is in one estate tax year and the purchase in the next?
Form 8824 goes with the return for the year in which the relinquished property was transferred. The replacement's closing date is entered on line 6 of that form even though it falls in the following year.
Can the executor change the estate's fiscal year to fix the deadline?
The year is adopted on the first Form 1041 and a later change is not something to count on. If the first return has not been filed, pick the year end with the exchange in view; if it has, plan the sale and the Form 7004 around the due date already set.
Does Form 7004 give the estate more time to pay tax on a failed exchange?
No. The extension covers filing only; any tax is due by the original due date. The estate's exemption from estimated tax in its first two years does not change that.
The decedent sold the property and the estate is buying the replacement. Whose return caps the 180 days?
The decedent's final Form 1040 for the year of sale, because the decedent was the transferor. The personal representative extends it with Form 4868; the estate's own Form 1041 year does not enter into it.
Does a section 645 election change the 45-day or 180-day count?
No. Both periods still run from the transfer. The election only changes which return, and so which due date, applies to the trust's sale.
Sources
Checked against these publications on October 8, 2026. Rules and figures change; confirm the current version with your CPA or attorney before you act. This page is general information, not tax or legal advice.
- 26 U.S.C. Section 1031, exchange of real property held for productive use or investment
- Treas. Reg. Section 1.1031(k)-1, treatment of deferred exchanges
- IRS, Instructions for Form 1041, U.S. Income Tax Return for Estates and Trusts
- IRS, Instructions for Form 7004, application for automatic extension
- IRS Publication 559, Survivors, Executors, and Administrators
- 26 U.S.C. Section 645, certain revocable trusts treated as part of estate
- Treas. Reg. Section 1.645-1, election to treat a qualified revocable trust as part of the estate
- IRS, Instructions for Form 8824, Like-Kind Exchanges
- 26 U.S.C. Section 6072, time for filing income tax returns