How Long Do You Have to Reinvest Capital Gains: 45, 180, and 60 Days

How long you have to reinvest capital gains depends on which tax rule you’re using. A Section 1031 like-kind exchange and a Qualified Opportunity Fund investment each give you 180 days from the sale. A retirement account rollover gives you 60 days from the distribution. Property lost to casualty, theft, or condemnation under Section 1033 gives you two years, three years, or four years, depending on what happened. Miss any of these deadlines by a day and the gain is generally taxable in full.

Section 1031 Like-Kind Exchange: 45 Days and 180 Days

If you’re selling investment or business real estate and rolling the proceeds into similar real property, Section 1031 runs on two clocks that both start the day you transfer the original property. Since the Tax Cuts and Jobs Act took effect in 2018, this treatment applies only to real property. Vehicles, equipment, art, and other personal property no longer qualify.¹

You have 45 calendar days from the sale to identify potential replacement properties in writing, signed and delivered to someone involved in the exchange, such as your qualified intermediary or the seller of the replacement.² You can name up to three properties at any value. If you name more than three, their combined value can’t exceed twice the value of what you sold, or the IRS treats you as having identified nothing.

You then have 180 days from the sale to close on the replacement. The 45-day and 180-day windows run together, not back to back, so your total time from sale to closing is 180 days.³

One trap catches people every year. If your tax return for the year of the sale is due before day 180, the window closes on your filing deadline instead. For a sale in October or later, that can cost you weeks or months. The statute measures the deadline with regard to extensions, so filing Form 4868 for a standard six-month extension restores the full 180 days.³

You also cannot touch the sale proceeds. A qualified intermediary must hold the funds and use them to buy the replacement. If the money hits your bank account, even briefly, the deferral is lost and the sale is fully taxable. Any cash you pocket or debt relief you gain from an unequal trade is taxable “boot” even when the rest of the exchange qualifies.

The exchange gets reported on Form 8824 with your return for the year of the sale.⁴

Qualified Opportunity Funds: 180 Days, and a Hard Stop in 2026

A Qualified Opportunity Fund lets you defer capital gains tax by investing the gain in a fund that develops property in designated low-income zones. You have 180 days from the sale or exchange that produced the gain to make the investment.⁵ Unlike a 1031 exchange, this works for any kind of capital gain: stock sales, real estate, business sales, or other appreciated assets.

If the gain flows through a partnership, S-corporation, or trust, the 180 days can instead start on the last day of the entity’s taxable year, giving partners and shareholders time to receive their Schedule K-1. Whichever start date you pick, document it so your position is consistent if the IRS looks.

The December 31, 2026 Recognition Date

Every deferred gain currently sitting in a QOF has to be recognized by December 31, 2026, whether or not you’ve sold the investment.⁶ If you deferred a $200,000 gain by investing in a QOF in 2022, that $200,000 lands on your 2026 return.

Hold a QOF investment for at least 10 years and you can elect to step its basis up to fair market value on the date you sell, wiping out capital gains tax on the appreciation. That step-up applies only to the growth inside the QOF, not to the original deferred gain, which still comes due by the 2026 date.⁵

You report QOF holdings and dispositions each year on Form 8997.⁷

Involuntary Conversions: Two, Three, or Four Years

Section 1033 covers a different situation: your property was destroyed, stolen, or seized under threat of condemnation, and you’re reinvesting insurance or condemnation proceeds into similar property. The replacement windows are much longer than under Section 1031.

The default rule is two years after the close of the first tax year in which any part of the gain is realized. If your property was destroyed in March 2026 and you received the insurance payout that year, you have until December 31, 2028 to buy a replacement. For real estate condemned or seized by a government authority, the window is three years.⁸

If your principal residence or its contents are destroyed in a federally declared disaster area, the two-year period doubles to four years. Livestock losses from drought or severe weather also get the four-year window, and the IRS can extend it further on a regional basis when conditions persist beyond three years.⁸ You can also apply directly to the IRS for more time if your circumstances warrant it.

Retirement Account Rollovers: 60 Days

If you take a distribution from a retirement plan or IRA and want to roll it into another eligible plan or IRA yourself, you have 60 days from the date you receive it. Blow the deadline and the entire distribution becomes taxable income.⁹ If you’re under 59½, a 10% early withdrawal penalty is added.¹⁰

The 20% Withholding Problem

When a plan pays a distribution directly to you rather than transferring it to another plan, the administrator must withhold 20% for federal tax. To roll over the full original amount, you have to make up that 20% out of pocket and deposit it into the new account within 60 days. On a $50,000 distribution with $10,000 withheld, you’d need to deposit the $40,000 you received plus $10,000 from savings. The withheld amount that doesn’t get replaced is treated as a taxable distribution.⁹

One Per Year, or Skip the Clock Entirely

You get one indirect IRA-to-IRA rollover in any 12-month period, no matter how many IRAs you own.⁹ A direct trustee-to-trustee transfer avoids all of it: no 60-day clock, no 20% withholding, no one-per-year cap. When it’s an option, it’s the safer route.

Missed the 60 Days? Self-Certify for a Waiver

If you miss the deadline for reasons outside your control, Revenue Procedure 2016-47 lets you self-certify for a waiver. Qualifying reasons include a financial institution’s error, serious illness or a death in the family, a misplaced check that was never cashed, severe damage to your home, incarceration, and postal errors.¹¹ You submit a written certification to the receiving trustee stating the reason. The certification is accepted unless the IRS later audits and disagrees, so keep documentation.

Selling Your Home: No Reinvestment Required

One boundary worth flagging: if the “capital gain” you’re worried about came from selling your main home, you probably don’t need to reinvest anything. Section 121 lets you exclude up to $250,000 of gain, or $500,000 for a married couple filing jointly, as long as you owned and lived in the home for at least two of the five years before the sale.¹² There’s no requirement to buy another home and no reinvestment clock. The old rule that made people roll proceeds into a new house doesn’t exist anymore.

Reinvesting After a Loss: Watch the 30-Day Wash Sale Window

If part of what you’re doing is selling a losing investment and buying back in, the wash sale rule sets its own timing. Sell a stock or security at a loss and buy the same or a substantially identical one within 30 days before or after the sale, and the IRS disallows the loss deduction for that year.¹³

The window runs both directions. Buying a replacement 15 days before the sale triggers it. So does buying one 25 days after. The disallowed loss isn’t lost forever; it gets added to the basis of the replacement shares. But you can’t claim it in the current year. The practical rule: wait at least 31 days to repurchase the same security, or buy something that isn’t substantially identical. Stock in a different company, or a fund tracking a different index, is generally safe ground.

1
Internal Revenue Service. Like-Kind Exchanges – Real Estate Tax Tips
2
Internal Revenue Service. Like-Kind Exchanges Under IRC Section 1031
3
Office of the Law Revision Counsel. 26 U.S. Code 1031 – Exchange of Real Property Held for Productive Use or Investment
4
Internal Revenue Service. Instructions for Form 8824
5
Office of the Law Revision Counsel. 26 USC 1400Z-2 – Special Rules for Capital Gains Invested in Opportunity Zones
6
Internal Revenue Service. Opportunity Zones Frequently Asked Questions
7
Internal Revenue Service. About Form 8997, Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments
8
Office of the Law Revision Counsel. 26 USC 1033 – Involuntary Conversions
9
Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions
10
Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions
11
Internal Revenue Service. Revenue Procedure 2016-47 – Waiver of 60-Day Rollover Requirement
12
Office of the Law Revision Counsel. 26 USC 121 – Exclusion of Gain From Sale of Principal Residence
13
Office of the Law Revision Counsel. 26 U.S. Code 1091 – Loss From Wash Sales of Stock or Securities