The COVID-19 affected certain deadlines, including those of a 1031 exchange. On March 13, 2020, the President of the United States issued an emergency declaration in response to the ongoing Coronavirus Disease 2019 (COVID-19) pandemic. The IRS issued a Notice 2020-23 allowing the postponement of the time for performing certain acts. This was a result of the president’s declaration and the help of The Federation of Exchange Accommodators (FEA).
Normally, a 1031 exchanger needs to identify the replacement property within 45 days. And, the exchanger also needs to the complete the purchase of the replacement property within 180 days from the date of the sale. However, due to COVID-19, if your 1031 exchange deadline was on or after April 1 and before July 15, it is now due on July 15, 2020. In other words, any deadline between April 1- July 15 is extended to July 15, 2020. However, there is still confusion regarding whether the extension is mandatory or just permissible. I found that Accruit, a 1031 exchange specialist, provides up to date information regarding COVID-19 and 1031 Exchange Deadlines.
If you are looking to gain more knowledge regarding a 1031 exchange, please let me know. It is a great mechanism for tax deferral of real estate capital gains. So, I recommend using this mechanism for several reasons that I am happy to share with you. Please, contact me here if you would like to know more about how it works, costs, benefits, and the process of getting the exchange completed. I have personally done a few of these myself. And, I have have also helped clients complete real estate transaction within the 1031 exchange requirements.