The IRS has issued further postponements of the 45-day and 180-day deadlines as follows:
New California Postponement for disaster beginning December 27, 2022: Alameda, Butte, Calaveras, Colusa, Contra Costa, Fresno, Glenn, Humboldt, Los Angeles, Marin, Mendocino, Merced, Monterey, Placer, Sacramento, San Benito, San Joaquin, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Cruz, Siskiyou, Sonoma, Trinity, Tulare, Ventura, and Yolo counties. The disaster began on December 27, 2022. The General Postponement date is OCTOBER 16, 2023.
Update to California Postponement for disaster beginning January 8, 2023: Alameda, Colusa, Contra Costa, El Dorado, Fresno, Glenn, Humboldt, 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. The disaster began on January 8, 2023. The General Postponement date is delayed to OCTOBER 16, 2023.
The Covered Disaster Area is the counties or parishes listed above. [Please check the IRS disaster website periodically at the address listed below for updates.]
An “Affected Taxpayer” includes individuals who live and businesses whose principal place of business is located in the Covered Disaster Area. Affected Taxpayers are entitled to relief regardless of where the relinquished or replacement property is located. Affected Taxpayers may choose either the General Postponement relief under Section 6 OR the Alternative relief under Section 17 of Rev. Proc. 2018-58. Taxpayers who do not meet the definition of Affected Taxpayers do not qualify for Section 6 General Postponement relief.
Option One: General Postponement under Section 6 of Rev. Proc. 2018-58 (Affected Taxpayers only). Any 45-day or 180-day deadline (for either a forward or reverse exchange) that falls on or after the Disaster Date above is postponed to the General Postponement date. The General Postponement applies regardless of the date the Relinquished property was transferred (or the parked property acquired by the EAT) and is available to Affected Taxpayers regardless of whether their exchange began before or after the Disaster Date.
Option Two: Section 17 Alternative [Available to (1) Affected Taxpayers and (2) other taxpayers who have difficulty meeting the exchange deadlines. See Rev. Proc. 2018-58, Section 17 for conditions constituting “difficulty”]. Option Two is only available if the relinquished property was transferred (or the parked property was acquired by the EAT) on or before the Disaster Date. Any 45-day or 180-day deadline that falls on or after the Disaster Date is extended to THE LONGER OF: (1) 120 days from such deadline; OR (2) the General Postponement Date.
Important for the 10/16/23 date if it is a 2022 exchange! Note that the date may not be extended beyond one year or the due date (including extensions) of the tax return for the year of the disposition of the relinquished property (typically, if an extension was filed, 9/15 for corporations and partnerships and 10/15 for other taxpayers).
Please see Revenue Procedure 2018-58, Section 17, and the Notices at https://www.irs.gov/newsroom/tax-relief-in-disaster-situations.
As always, Peak 1031 Exchange may not act as a tax or legal advisor. Exchangers should speak with their tax advisors to determine if they are eligible for an extension and if so, what their new exchange deadlines are. If you or someone you know has questions about the 1031 exchange process, we at Peak 1031 Exchange are your qualified experts who are here to help. Contact us today at [email protected] or by calling us at 866-357-1031 to discuss the deferral of capital gains taxes with a 1031 exchange.