On April 9, 2020, the Internal Revenue Service (IRS) released
Notice 2020-23 (updating Notice 2020-18 and 2020-20) extending
various tax deadlines relating to the COVID-19 virus for
“affected taxpayers." Among the deadlines extended were
the commonly-used "safe harbors" of 45-day identification
period and 180-day exchange period for taxpayers who are currently
engaged in a Section 1031 like-kind exchange.
Prior IRS guidance on Internal Revenue Code Section 1031
provided taxpayers with a safe harbor window for compliance if,
after a taxpayer sells relinquished property and deposits the
proceeds, the taxpayer identified a replacement property within 45
days from the sale of the relinquished property and completed the
purchase of a replacement property within 180 days of the sale of
the relinquished property. The IRS extension was in response to a
letter to the IRS from several real estate organizations expressing
their concern about pending like-kind exchanges.
