Many people want to know if the 1031 exchange 180 day period is a hard-and-fast deadline or if there's flexibility to prolong the exchange period.
As a General Rule
The general rule is no, you can't go beyond the 180th day. It is a hard and fast rule. That being said, many people have been affected by hurricanes and other federally declared disasters that are eligible for extensions under rev proc 2007 – 50.
Federal Disaster Areas
However, in some situations the executive branch will issue a notice that a certain geographic area has been declared a federal disaster area and folks that are in that area may be eligible for extensions (typically of 120 days from the date of the disaster).
Other taxpayers who are not in that geographic area but are doing business transactions within the disaster area may also be eligible for extensions, but the notices typically require the taxpayers to contact the IRS and to explain why they are directly and adversely affected by the disaster. Maybe their title company was flooded out, for example.
So you need to follow the notice issued by the executive branch and the requirements of rev proc 2007. If you do that you may be eligible for an extension but there are limits on how far that extension can go out. You should always work with a competent CPA to make sure you're eligible for the extension and understand how long that extension is in relation to your exchange.
- 1031 Hotline: If you have questions about 1031 exchange deadlines, feel free to call me at 612-643-1031.
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