1031 Exchange - Possible to extend?

Question

Hi all,

Is anyone else currently in the middle of a 1031 exchange? Looking for options to extend the timeframe.  We are under contract on one property that will use half the value of the 1031, and are considering our options for what to do with the other half.

I see there is something called "Revenue Procedure 2007-56" where the 45 and 180 day periods can each be extended by 120 days in the event of a natural disaster - curious if this applies to our current state of events?

Appreciate any feedback.

Dave Foster · Answer

@Kevin Lisewski, Two things have to happen.  First the President has to declare a national emergency - Check.  Secondly the IRS has to change the dates to extend filings and specifically reference the Revenue Procedure.  That hasn't happened yet as of this morning I don't think.  If I was a betting guy I'd say it would happen.  But I wouldn't bet much.  Best to act as if there's no extension and treat one like Christmas.

Ali Zaid · Answer

@Kevin Lisewski I actually backed down from all the three contract I put with 1031and I’m way passed the 45 day to me, I would risk paying capital gain taxes than buying property priced before this crisis hit. I tried to renegotiate the prices with the owners but they refused. I believe there will be great opportunities coming soon. If they extended it good. if not, I’ll recover with paying great assets at great prices. Good luck!

Brian Boyd · Answer

@Kevin Lisewski this might actually be the singular moment time that you could actually get this relief. It may be worth a call to your CPA or attorney to see if they can get you an extension without having to have PLR. It’s worth a shot, go for it. All they can do is say no. Good luck and keep us posted!

Dave Foster · Answer

Sorry, forgot about this - Rev Proc  2018-58 updates the rev proc listed above.  There will be an IRS news release if they change filing deadlines.

Kevin Lisewski · Answer

@Dave Foster

Thanks all for the great info.  Spoke to our 1031 intermediary, and while it's not possible to extend yet (as we know) they feel it is likely in the short term that the IRS will allow it.

I will update this thread if I learn more.  My 45 days are up April 20, so I have time to sit back and observe the market in the interim.

Alex Olson · Answer

@Kevin Lisewski Way too early to tell at this point in time. From what I am hear, I doubt it. I would err on the side of the caution and continue to proceed with your exchange in identifying three properties before your 45 days are up. Make sure to use the Delaware Statutory Trust as a fail safe option so you are not left holding the bag.

Wayne Brooks · Answer

@Dave Foster ??

Lauren Speidel · Answer

@Kevin Lisewski Notice 2020-23 which was released on April 9th does provide an extension for 1031 Exchange taxpayers who are currently engaged in a 1031 Exchange transaction. The      extension granted applies to investors that have already sold and closed      on the sale of their relinquished property and their 45-calendar day      identification period or their 180-calendar day exchange period falls      between April 1st, 2020 and July 15th, 2020.       The 45-calendar day identification and the 180-calendar day exchange      deadlines have been extended to July 15th, 2020.

Kevin Lisewski · Answer

FYI I am hearing from realtor contacts that a 1031 exchange has been granted by the IRS.  For now, nothing on the IRS site but am checking with my intermediary.

Alyssa Dyer · Answer

@Kevin Lisewski let us know if getting things leased ends up being tough or not. Curious how things will play out in different markets!

1031 Exchange - Possible to extend?

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