As the entire world is occupied in battling COVID-19, real estate investors are facing difficulties in expanding their investments. Not only in the United States, but the worldwide real estate market has come to a halt. Investors are looking for every possible way to keep their investment running. If you are also one of them, there is a way to invest in real estate during this lockdown. A 1031 exchange can help you get hold of a premium investment property along with the opportunity to defer capital gain taxes. To qualify for a 1031 exchange, you must follow the rules established by the IRS. For people living in Georgia, here are the major 1031 exchange rules –
1031 Exchange Georgia Rules –
- You must hire a Qualified Intermediary (QI) for your 1031 exchange.
- Post trading your old investment property (relinquished property), you must identify a new one (replacement property) within 45 days.
- The two properties – the sold one and the identified one – must be like-kind.
- A 1031 exchange must be completed in 180 days.
These are the three most basic rules of a 1031 exchange, and whether you live in Georgia or any other state, you must follow these rules to qualify for a 1031 exchange.
Keeping the lockdown in mind, the IRS has made some adjustments in the deadlines.
On normal days, an investor must identify a replacement property within 45 days from the sale of their investment property. However, as everyone is locked inside their homes, identifying a property has become next to impossible. Considering the challenges investors are facing these days, the IRS has made some adjustments in 1031 exchange deadlines. As per the recent IRS ruling, if you have signed up for a 1031 exchange on or after April 1, 2020, you can submit your identification till July 15. By extending the deadlines, the IRS has given investors the much-needed time. You can use this opportunity to find an ideal replacement property for your 1031 exchange. Several real estate firms that facilitate 1031 exchanges provide investors a customized 1031 exchange property list. Get your hands on a property list before its too late.
Experts think there could be another extension.
Though the IRS has extended the 1031 exchange deadlines, the question is, is there enough time? Some market experts believe that there could be another extension in 1031 exchange deadlines depending upon the current situation. As the situation outside has started to improve, reaching to the normal state is still a far-fetched dream. Therefore, there will be no surprise if the IRS decides to extend the deadlines further.