Will we get another 1031 Exchange extension?

Question

Earlier this year, the IRS issued guidance extending the time periods for individuals currently in a 1031 Exchange due to the Coronavirus pandemic. IRS Notice 2020-23 provides that those performing time-sensitive actions listed in Revenue Procedure 2018-58 due to be performed on or after April 1 and before July 15, 2020 is an Affected Taxpayer.

It appears Exchangors whose 45-day identification period or 180-day exchange period falls between April 1, 2020 and July 15,2020 will have until July 15 to identify and/or purchase a replacement property for 1031 exchanges.

July 15th has now passed.

What do you all think... any chance we get another extension?

Bill Exeter · Answer

At this point, we do not anticipate any further extensions.  The Treasury had indicated about two months ago that they were aware of the confusion surrounding the extensions for 1031 Exchange.  They indicated they would be issuing FAQs to help taxpayers understand their prior guidance.  They have not issued the FAQs yet, and there have been no meaningful rumblings yet regarding an additional extension of deadlines for 1031 Exchanges.  We did receive an extension of time for Qualified Opportunity Zones a few weeks back, but nothing on the 1031 Exchange front.  This tells me that we are not going to see anything further.  Time will tell.

Joseph Cacciapaglia · Answer

Not to be negative, but I would bet the answer is no. They didn't extend the tax deadline, so I think it's very unlikely they'll retroactively decide to extend the 1031 deadline. I have no real basis for this thought though.

Celia Moore · Answer

@Bill Exeter that is true, the last extension caused quite the confusion... thank you for the info.

One can be hopeful though!