If you give up property used for business or investment in return for replacement property of a like-kind that you will receive later, the exchange is a deferred exchange and can still qualify as a nontaxable exchange. But if you receive money or other unlike property in full payment for the property you gave up, before you receive the replacement property, the transaction will be considered a sale rather than an exchange, and you would have to recognize any gain or loss on the transaction. If you subsequently receive the replacement property, you would be considered to have bought it.
In order to be a qualified deferred exchange, eligible to be treated as nontaxable, you must identify the replacement property to be received within 45 days after transferring the property you give up in the exchange. The property you expect to receive should be clearly identified in writing and this document should be delivered to the other party in the exchange.
Identifying Replacement Property
You can cancel an identification of the replacement property at any time during the 45-day identification period. And, you can identify more than one replacement property. The limit is three separate properties, or any number of replacement properties provided that the total fair market value at the end of the 45-day identification period is not more than twice the fair market value of the property you are giving up in the exchange, as of the date you transfer it.
In a deferred exchange you can identify replacement property that has not yet been produced. In this case, the property must be received by the later of 180 days after you transferred the property you gave up in the exchange, or the due date for filing your tax return for the year in which you gave up property in the exchange.