The short answer
A delayed exchange is a like-kind exchange in which you transfer your relinquished property first and receive the replacement property later, under an agreement, within the deadlines in section 1031(a)(3). The regulations call it a deferred exchange, and it is also called a forward or Starker exchange after a 1979 Ninth Circuit case. The standard version runs through a qualified intermediary so you never hold the sale proceeds.
At a glance
| Identification | In writing by midnight on day 45 after the transfer |
|---|---|
| Exchange period | Ends at the earlier of day 180 or your return due date, including extensions |
| In the Code since | 1984, for transfers after July 18, 1984 |
| Standard structure | Qualified intermediary under a written exchange agreement |
The name comes from a 1979 timberland case, and Congress set the deadlines in 1984
In 1967 T. J. Starker and family members deeded 1,843 acres of Oregon timberland to a corporation that promised to acquire and deed other real property to them within five years or pay any balance in cash, adding a 6% annual growth factor. The replacement parcels arrived over the following two years.
The Ninth Circuit held in Starker v. United States, 602 F.2d 1341 (1979), that the transfers did not need to be simultaneous, so the parcels he received as investment property qualified. Two parcels deeded to his daughter, one of which became his residence, were taxed as boot.
The Tax Reform Act of 1984, Public Law 98-369, then added section 1031(a)(3) for transfers after July 18, 1984. Replacement property is not like kind unless it is identified within 45 days and received within 180 days or by the return due date, if earlier.
Worked example: a fall sale, its two deadlines, and the qualified intermediary in the middle
Reg. section 1.1031(k)-1(a) defines a deferred exchange as one where, under an agreement, you transfer relinquished property and later receive replacement property. A sale followed by a purchase does not qualify, which is why the exchange agreement and a qualified intermediary come before closing. Your sale contract is assigned to the intermediary with written notice to all parties, the buyer's funds go to the intermediary, and it acquires the replacement and deeds it to you.
Hypothetical: your sale closes on October 1, 2026. Under the regulation, day 45 ends at midnight on November 15, 2026, and day 180 ends at midnight on March 30, 2027, which falls before a calendar-year individual's 2026 return due date. Close on December 1 instead and day 180 lands on May 30, 2027, after that due date, so you need a filing extension to keep the full period.
Both periods begin on the transfer date and end at midnight on the 45th and 180th day thereafter, and the regulation's text has no weekend rollover; see weekend and holiday deadlines. Confirm your own dates with your intermediary and CPA before you sign a closing date.
Where it bites: touching the money, skipping the assignment, and buying first
If you actually or constructively receive the full proceeds before you receive replacement property, Reg. section 1.1031(k)-1(f) treats the deal as a sale even if you buy like-kind property later.
The intermediary must really sit in the chain. In Example 5 of Reg. section 1.1031(k)-1(g)(8), the seller deeded directly to the buyer without assigning the contract, so the intermediary did not qualify and the transfer was a sale.
A delayed exchange runs one way. Buying the replacement before you sell is a reverse exchange, which Rev. Proc. 2000-37 handles through an exchange accommodation titleholder; see the reverse 1031 exchange guide.
Related questions
Why is it called a Starker exchange?
After Starker v. United States, the 1979 Ninth Circuit decision that allowed an exchange where the replacement property was received after the relinquished property was transferred. The IRS still refers to buy-first transactions as reverse-Starker exchanges.
Can the 180 days be cut short?
Yes. The exchange period ends on the earlier of day 180 or the due date, including extensions, of your return for the year of the sale. A sale late in the year can need an extension; see keeping the full 180 days.
Do the 45 days run separately from the 180 days?
No. Both periods start on the transfer date, so the 45-day window sits inside the 180 days; see 45 days inside 180 days.
Sources
Checked against these publications on September 30, 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.