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1031 Exchange Insights: Rising Interest Rates and Year-End Tax Deadline

Exeter EMPOWER Newsletter
A Newsletter by The Exeter Group, LLC
Volume 2 – Issue 12
Welcome to Exeter EMPOWER, your trusted source for expert guidance on 1031 exchanges, Delaware Statutory Trusts, self-directed IRAs, self-directed individual 401(k) plans, private fund custody, directed and administrative trustee services, title holding trusts, specialty holding escrows, and custody services.
In this edition:
• Rising Interest Rates May Create Opportunity for 1031 Exchange Investors
• When Your 1031 Exchange Straddles Two Tax Years: What You Need To Know About The Deadlines
 
Rising Interest Rates May Create Opportunity for 1031 Exchange Investors
The Federal Reserve just raised interest rates for the first time in three years, and the immediate reaction from most investors is concern. But rising rates often work in favor of well-prepared 1031 exchange investors: higher borrowing costs push some buyers to the sidelines, which means less competition, softer pricing, and better negotiating leverage for investors who are ready to act. Historically, the best acquisitions get made during periods when financing is tougher and sentiment is negative – not when everyone else is bidding.
Rising Interest Rates: What They Mean for Real Estate Investors - Watch Video
Hear it from Lauren
Rising rates also tend to soften prices, which means lower acquisition costs and higher cap rates for buyers with capital ready to deploy. And on the multifamily side, would-be homebuyers priced out of a mortgage become renters instead, which can mean stronger occupancy, rent growth, and less tenant turnover for owners. As Lauren puts it: strong investors separate from weak investors when financing gets harder – almost anyone can make the numbers work in a low-rate environment.
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When Your 1031 Exchange Straddles Two Tax Years: What You Need To Know About The Deadlines
If you sell your relinquished property late in the year, your 1031 exchange will almost certainly cross into a new tax year – and that creates a layer of deadline complexity that trips up even experienced investors. The standard rules still apply: you have 45 days to identify replacement property and 180 days to close. But when those windows span two tax years, your tax return due date for the year of sale can cut your 180-day window short if you are not careful.
1031 Exchange Deadlines Across Tax Years
The IRS requires that your exchange be completed by the earlier of 180 days after the sale of your relinquished property or the due date of your tax return (including extensions) for the year in which the relinquished property was sold. Filing for an extension is often the smartest move to protect the full 180-day period – but only if you act before the original return deadline. Bill Exeter breaks down exactly how to plan around these overlapping timelines so your exchange stays on track.
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Exeter 1031
Exeter 1031 Exchange Services, LLC
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The Exeter Group, LLC | 404 Camino del Rio South, Suite 600, San Diego, CA 92108
Picture of William “Bill” L. Exeter

William “Bill” L. Exeter

Founder and Chief Executive Officer of The Exeter Group of Companies and a long-time leader in 1031 exchanges, qualified trust accounts for 1031 exchanges, self-directed IRAs, self-directed individual 401(k) plans, custody services for retirement plans, private fund custody services, directed administrative trustee services, non-traditional investments or alternative investments, specialty holding escrows and title holding trusts (land trusts). He has spent his career helping individual, corporate, and institutional real estate investors and their advisors navigate complex tax-deferred transactions with clarity, care, and a strong focus on protecting client assets. Bill is known for his practical, plain-English approach to education and his belief that investors deserve transparency, responsiveness, and trust at every step of the process.
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