There are a few items in the Coronavirus Aid, Relief, and
Economic Security (CARES) Act and other recent legislation that
have a direct effect on many of our real estate clients. These
include:
- The correction to the 2017 Tax Cuts and Jobs Act (TCJA)
regarding Qualified Improvement Property (QIP);
- An extension of certain timelines for like-kind exchanges for
real property; and
- The opportunity — for only a short time — to revoke
the previously irrevocable election out of the business interest
deduction limitations.
Like-Kind Exchange Provisions
The like-kind exchange provisions are easier, and just factual,
so we will tackle those first. One of the relief provisions in IRS Notice 2020-23 (an update to Notice
2020-18) states that for those engaged in a 1031 exchange, if the
taxpayer's 45-day identification period or 180-day exchange
period deadline falls between April 1, 2020 and July 14, 2020, the
deadline is automatically extended to July 15, 2020.
