FOR IMMEDIATE RELEASE

IRS GRANTS EXTENSION FOR 1031 EXCHANGES

Al DiNi­co­la DST Invest­ments, LLC — Reg­is­tered Invest­ment Advi­sors

April 12, 2020

Just last week I post­ed and arti­cle regard­ing the absence of any ref­er­ence with­in the CARES Act to the 1031 Exchange process. Well, there must have been a lot of oth­er con­cerns with this absence. I have been involved with real estate and 1031 exchange replace­ment prop­er­ty since 1980. This is the first time I have seen an exten­sion of the 45-day peri­od on a nation­wide basis. I hope this infor­ma­tion is valu­able to any­one who is doing an exchange now or in the near future.

DST Invest­ments, LLC rep­re­sents the major insti­tu­tion­al DST Spon­sors who offer replace­ment prop­er­ties that qual­i­fy for the IRS 1031 Tax Deferred Exchange

45 and 180 Cal­en­dar Day Dead­lines Extend­ed to July 15, 2020

April 10, 2020—the U.S. Trea­sury (Inter­nal Rev­enue Ser­vice) issued Notice 2020–23 late Thurs­day evening, April 9, 2020, grant­i­ng relief to investors that are in the mid­dle of a 1031 Exchange trans­ac­tion.

This Notice is very dif­fer­ent from the typ­i­cal dis­as­ter dec­la­ra­tion and exten­sions grant­ed in the past and is some­what con­fus­ing based upon the way it was draft­ed. His­tor­i­cal­ly, the Pres­i­dent would declare a Nat­ur­al Dis­as­ter for a spe­cif­ic geo­graph­ic area and a date spe­cif­ic event and the U.S. Trea­sury (Inter­nal Rev­enue Ser­vice) would then issue a Dis­as­ter Relief Notice pro­vid­ing a 120-cal­en­dar day exten­sion to the 45-day and 180-cal­en­dar day dead­lines. This approach was not used this time.

Notice 2020–23, which revis­es Notice 2020–18, 2020–15 IRB 590 (April 6, 2020), and Notice 2020–20, 2020–16 IRB 660 (April 13, 2020), does not specif­i­cal­ly address Sec­tion 17 con­tained with­in Rev­enue Pro­ce­dure 2018–58, so it would ini­tial­ly appear that the 120-cal­en­dar day exten­sion is not applic­a­ble to the cur­rent sit­u­a­tion.

Affect­ed Tax­pay­er (Investor)

The Notice pro­vides that any per­son per­form­ing a time-sen­si­tive action list­ed in either Sec­tion 301.7508A‑1©(1)(iv) – (vi) of the Pro­ce­dure and Admin­is­tra­tion Reg­u­la­tions or Rev­enue Pro­ce­dure 2018–58, 2018–50 IRB 990 (Decem­ber 10, 2018), which is due to be per­formed on or after April 1, 2020, and on or before July 15, 2020 (Spec­i­fied Time-Sen­si­tive Action), is an Affect­ed Tax­pay­er.

Dead­line Exten­sion

There­fore, the guid­ance pro­vid­ed with­in Notice 2020–23 applies to investors that have a 45-cal­en­dar day iden­ti­fi­ca­tion dead­line or a 180-cal­en­dar day exchange dead­line that falls on or after April 1st, 2020 and on or before July 15th, 2020. The applic­a­ble dead­line that falls with­in those time­lines is extend­ed to July 15th, 2020.                

DST Invest­ments, LLC is not intend­ed to serve as legal, tax or finan­cial advice and make no express or implied war­ran­ty respect­ing the infor­ma­tion pre­sent­ed here­in and assumes no respon­si­bil­i­ty or lia­bil­i­ty for errors or omis­sions con­tained here­in. You should con­sult with your own legal, tax and finan­cial advi­sors regard­ing your spe­cif­ic real estate trans­ac­tion or income tax cir­cum­stance.

If you are con­sid­er­ing sell­ing your invest­ment prop­er­ty and look­ing for a log­i­cal alter­na­tive for a replace­ment prop­er­ty, please con­tact us.  We have over 40 years’ expe­ri­ence in the real estate mar­ket and 1031 exchanges.  My name is Al DiNi­co­la, my toll-free num­ber is 800.378.0515 exten­sion 700 and my email address is. adinicola@dst.investments.  Mean­while, stay safe and healthy!

*DST are Delaware Statu­to­ry Trust and are avail­able only to Accred­it­ed Investors.