The ongoing COVID-19 outbreak is causing a lot of uncertainty in all industries – and commercial real estate is no exception. Many people have questions about whether COVID-19 is disrupting the 1031 exchange process. In this article, we are going to discuss how the COVID-19 pandemic is impacting 1031 exchanges.
Deadlines & Timeframes
In a typical 1031 exchange, the taxpayer conducting the exchange has to abide by strict deadlines. Specifically, you only have 180 days to complete your exchange once you initiate the process. The first 45 of those days are set aside as your identification period in which you must identify in writing your replacement property.
There are rare circumstances in which these deadlines can be changed. IRS Revenue Procedure 2018-58 allows for these 1031 exchange deadlines to be extended in the event of a federally declared disaster, but only when the IRS releases guidelines authorizing this to go into effect. That has not happened yet as of the time of this writing, but taxpayers should keep their ear to the ground over the coming weeks and months to prepare for this possibility.
If a federally declared disaster is implemented and the IRS does issue guidelines on the topic, it’s a good idea to work closely with your qualified intermediary as there are additional qualifying requirements you must meet to extend your deadlines.
Jump Start Your 1031 Exchange Today
At CPEC1031, we work with clients across the country on 1031 exchanges of all shapes and sizes. Our qualified intermediaries have over two decades of experience facilitating like-kind exchanges and can help you prepare 1031 documents and advise you throughout the process. Contact us today to learn more about our full range of services and see if you are a good candidate for 1031 exchange. You can find us at our primary offices located in downtown Minneapolis.
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
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