BREAKING NEWS:
IRS Disaster Notices Bring Unprecedented 1031 Deadline Extensions to California
Frequently, listing your property with the hopes of completing a 1031 Exchange can cause stress because of the 1031 Exchange deadlines.
However, that has temporarily changed due to the recent update to the disaster extensions impacting most counties in California. If you are a resident of or have your principal place of business in California, you may be considered an “affected taxpayer” that is eligible to significantly extend the 1031 Exchange timelines. To determine if you are an “affected taxpayer” please review this blog post on the IPX1031 website and consult with your tax advisor.
The recently released update extension not only delays the tax filing deadline to October 16, 2023, it could also extend your 1031 Exchange deadlines until October 16, 2023 as well!
For example: Typically, if you were to close your investment property on April 1st, you would have until May 16th to identify property and September 28th to close (45 and 180 days respectively). With this recent extension however, you will now have until October 16th to both identify AND close your Replacement Property.
This will allow for clients that are doing 1031 Exchanges to take more time to do the due diligence on properties that they intend to purchase and potentially take advantage of lower interest rates, if rates start to decrease later in the year. Instead of rushing to find suitable Replacement Properties that meet your needs, you will now have a lot more time to make one of the biggest financial decisions of your life.
As you can see, now is an INCREDIBLE time to list and sell your investment property and exchange into a better performing asset.
Thanks to Stephen Decker, Senior VP at IPX1031 for the article.