IRS Section 121 Exclusion COVID Extension??

[Andrew McGregor]

Does anyone know if there are any 'hardship clauses' or anything that would allow for a deadline extension of an IRS 121 Exclusion?  I am selling a house that was my residence and I need to sell it before August to qualify for the 121 Exclusion.  I think the Covid-19 shutdown has impacted the market and I would like to hold off on selling if possible.  There is talk of the IRS extending 1031 deadlines, any chance the same could be done for the 121??

[Natalie Kolodij]

Originally posted by @Justin Tahilramani:

Originally posted by @Natalie Kolodij:

Mmmmm no. 

The guidance they released relates to "time sensitive" transactions- IE 180 days on a 1031. 

You had three years to sell your property after moving out of it as a primary. Doesn't fall under the current guidance. You made a choose to hold out til the very end of the 3 years, it wasn't really a time sensitive situation until you allowed it to be unfortunately. 

I can't imagine there being an extension to this circumstance. 

Natalie - I heard somewhere that the CARES act is allowing landlords to expense items that would normally need to be capitalized in 2020. Is that true?

It just corrected lease hold improvements. It was written wrong in the TCJA and it was accidentally made 39 year property instead of 15. 

Lease hold improvements apply to commercial properties- if you own a big office building and build out the cubicles and office rooms needed for your tenant. Those "improvements" are 15 year.