Urgent Update for 1031 Exchanges: COVID-19 Timeline Extensions

On Thursday, April 9, 2020 the IRS published Notice 2020-23 issuing guidance granting deadline relief for 1031 Exchanges.

While IRS Notice 2020-23 leaves some issues unclear, the following key points are clear.

Who Qualifies for 1031 Exchange Timeline Extensions?

• Anyone who sold relinquished property whose 45-day deadline falls between April 1, 2020 and July 15, 2020.
• Anyone who sold relinquished property whose 180-day deadline falls between April 1, 2020 and July 15, 2020.

What is the IRS Notice 2020-23 Extension?

• It extends the 45-day deadline to July 15, 2020
• It extends the 180-day deadline to July 15, 2020

Examples of IRS Notice 2020-23 Extensions

• An exchanger sold their property on March 1, 2020. Their original 45-day deadline of April 15, 2020 is now extended to July 15, 2020.
• An exchanger sold their property on October 4, 2019. Their 180-day deadline of April 1, 2020 is now extended to July 15, 2020. They do not have an extension on their 45-day deadline.

As always, exchangers should speak with their tax advisor to determine if they are eligible for an extension.

This remains a fluid situation and we will provide any clarification or changes issued by the IRS.

Contact us today for more information and to talk with a 1031 exchange specialist.