Treasury Regulation §1.1031(k)-1(g)(6)) dictate the circumstances of when a Qualified Intermediary can release 1031 funds back to the client.
IRS requires Qualified Intermediaries to Extend to Exchangor’s full opportunity (180 days) to acquire all Designation Properties, which have been listed on their Designation Letters. This means that if an Exchangor lists more than one replacement property on the designation letter, Base Co. must wait the full 180 days to refund any unused exchange credits if all the designated replacement properties have not been acquired.
NOTE: The property or properties designated may be changed up to the end of the designation period (45 days). In order to make changes or additions, you must revoke the previous identification letter in writing to the Qualified Intermediary.