After the sale of your relinquished property and the deposit of the proceeds with the Qualified Intermediary (QI) if you are unable or unwilling to identify any replacement property, the proceeds, less the fee of the QI, will be returned to you with all accrued interest on the 46th day, and the sales proceeds will be taxed at the applicable rate.
If you do identify replacement property, but do not close on it within 180 days, the proceeds, less the fee of the QI, will be returned to you on the 181st day with all accrued interest, and the sales proceeds will be taxed at the applicable rate.
If you change your mind about closing on your replacement property and you want your proceeds returned, this would be an early disbursement, and contrary to the exchange agreement. In any event, if you do not close on the replacement property, the sale of your relinquished property will be taxed at the applicable tax rate.
NOTE: The content of this website is informational only. It does not constitute tax, legal or accounting advice. Each situation is different and you are advised to seek appropriate professional advice to see if a 1031 Exchange meets your needs.