On Wednesday, we issued a letter to United States Secretary of the Treasury Steven Mnuchin urging the Treasury Department and Internal Revenue Service to delay the deadline for like-kind (IRC §1031) exchanges.
Within the letter, we implored Secretary Mnuchin to extend the deadlines to identify replacement properties and complete like-kind exchanges for 120 days or to the last day of the general disaster extension period in light of the unfolding COVID-19 crisis and the resulting delays and hardships that taxpayers and real estate investors will be forced to burden as a consequence.
This request follows historical natural disaster precedent and is similar to the relief described from section 17 of Rev. Proc. 2018-58 and authorized under Internal Revenue Code 7508A.
“Both the contagious nature and shelter-in-place restrictions of the COVID-19 crisis are preventing taxpayers and real estate investors from completing like-kind exchanges. Many of these taxpayers are middle-class investors, small business owners, and hard-working Americans who may be severely financially hampered by the additional capital gains they’d need to pay without the ability to complete an exchange,” said David Wieland, CEO of Realized. “We are asking the Treasury Department and Internal Revenue Service to consider the immediacy of our request during this unprecedented time.”
The full letter is available here.
UPDATE: On Wednesday, March 25, 2020, we issued a letter to the United States Secretary of the Treasury Steven Mnuchin, urging the Treasury Department and Internal Revenue Service to delay the deadline for like-kind (IRC §1031) exchanges. On Thursday evening, April 9, the IRS released Notice 2020-23 as an update to Notice 2020-18, which provided relief to taxpayers affected by COVID-19. Thursday’s notice extended the taxpayer relief to like-kind exchanges, allowing investors whose identification or exchange periods would have fallen between April 1st and July 15th to now use July 15th as their extension deadline. Learn more about this update here.
We are grateful for the extension and appreciative to the Secretary of the Treasury, the Treasury Department, and the Internal Revenue Service for their willingness to provide accommodations for investors transacting a 1031 exchange. For those who are in need of assistance with their exchange, we stand ready and willing to help you identify like-kind property alternatives during this extended deadline. Please reach out to us at 877-797-1031.
The 1031 Investor's Guidebook
Tackle the art and science of completing your 1031 exchange.