Updated March 29, 2023
Do 1031 exchange dates qualify for disaster relief date extensions?
The recent IRS announcement providing disaster relief for California residents in Affected Counties automatically extends certain due dates for 1031 exchanges to as late as October 16th, 2023. Any business or individual taxpayer that resides in an Affected County would qualify, regardless of the location of the related real property being exchanged. Relinquished or replacement properties located in an affected area can also qualify even if the taxpayer or business (“non-affected taxpayers”) does not reside in an affected county. This post accompanies our article on the details of the IRS extension for storm victims.
Which legs and taxpayers in the 1031 exchange qualify for relief?
The relief comes in two forms described in Section 6 and Section 17 of Revenue Procedure 2018-58:
- Section 6 is for Affected Taxpayers only, and provides that any 45 day or 180 day deadline falling in between the disaster date (1/8/23) and the end of the postponement period (10/16/23) can postpone that due date until the last day of the postponement period (10/16/23).
- Section 17 applies to both Affected taxpayer and non-affected taxpayers, but only If the first leg of the exchange closed before the 1/8/23 date. This group receives a 120 day extension for either due date that applies but can extend no later than the due date of the tax return with extension. This section could theoretically apply to a 180 day due date associated with a relinquished property that closed as early as July 13, 2022 or an identification and replacement property closing due date associated with a relinquished property that closed as early as November 13, 2022.
California Qualifying Counties
Counties in California that have been designated as disaster areas by the Federal Emergency Management Agency (FEMA).
Alameda, Colusa, Contra Costa, El Dorado, Fresno, Glenn, Humboldt, Kern, Kings, Lake, Los Angeles, Madera, Marin, Mariposa, Mendocino, Merced, Mono, Monterey, Napa, Orange, Placer, Riverside, Sacramento, San Benito, San Bernardino, San Diego, San Francisco, San Joaquin, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Solano, Sonoma, Stanislaus, Sutter, Tehama, Tulare, Ventura, Yolo and Yuba counties.
Please reach out if you have any questions.
