IRS Declines Further COVID-19 Pandemic Extensions to §1031 Taxpayers
As we’ve previously discussed, earlier this year the IRS extended a handful of 1031 Exchange deadlines to July 15, 2020 with Notice 2020-23. This was to help the related difficulties taxpayers had been experiencing due to the pandemic.
Although the extensions clearly expired on July 15, some hoped that the IRS would grant additional extensions since COVID -19 is still creating issues with governments not permitting economic activity to resume unobstructed.
Any hope for further extension ended on August 11, when IRS conclusively published clarification that no further extension would be granted. Specifically, the IRS made clear that 120-day extensions available for typical disaster relief DO NOT APPLY to the COVID-19 disaster relief granted in Notice 2020-23. The IRS confirmed that the sole relief granted for like-kind exchanges was the stated limitation in Notice 2020-23, that only the §1031 deadline that fell between April 1, 2020 and July 14, 2020 could be extended to July 15, 2020.
In the simplest of terms, to the question “Will there be any further extensions to the prior COVID deadline extension ruling?”, the answer is a blunt “No”.
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