As the entire world is under a complete lockdown due to the rapid outbreak of COVID-19, entrepreneurs and realtors look most vulnerable. Stocks, bonds, and shares have hit rock bottom, and salvation looks nowhere near. In these times of hardship, investors are looking for every possible opportunity to safeguard themselves from the ongoing onslaught on the economy. Investing in any random property or asset might not be a wise decision at this moment. However, there is still a way you can avoid the financial damage. Most investors across the United States have opted for a 1031 exchange to come out of this economic crisis. If you’re also one of them, we have some good news for you.
No need to worry about closing your 1031 exchange identification, the IRS has approved an extension of the deadlines.
In recent guidance issued on April 9, 2020, the IRS said it would give additional time to investors to perform some specific time-sensitive actions, which mainly include 1031 like-kind exchange and opportunity zone investments. Unlike the traditional norms, this is probably the first time the IRS is granting an extension on 1031 exchange deadlines. As per the notice issued by the IRS, if you’ve already sold your investment property and either your identification or 1031 exchange period deadline falls April 1 and July 15, you can complete your transaction as late as by July 15. HURRAY! Isn’t this what you were dying to hear? You might know that under normal circumstances, the IRS asks you to identify one or more replacement properties within 45 days from the sale of your investment property. However, keeping the present situation in mind, the IRS has given relaxation on the 1031 exchange period as well as on the identification period. So, if you haven’t identified a property yet and were freaking out, you can take your time now and go through several buying options.
Experts say deadlines could further be extended.
Undoubtedly, the IRS decision has provided a huge relief to investors all across the nation. The president of the National Association of Realtors, Vince Malta, has welcomed this decision, offering massive relief to NAR’s members and their clients. Some experts also believe that there could be another extension if the pandemic situation doesn’t get better with time. They appreciated the IRS decision of extending the deadlines, calling it a huge step towards safeguarding realtors all across the nation. On the other hand, they believe 1031 exchange investors could expect a further extension in the deadlines if things don’t recover with time. Anyway, for thousands of investors like you, it’s a piece of great news.