Due to the Coronavirus (COVID-19) pandemic, the IRS has extended certain deadlines for Section 1031 exchanges and Opportunity Zone Funds.
Pursuant to IRS Notice 2020-23 the deadlines for the 45-day identification period in which the taxpayer must identify the replacement property and the 180-day exchange period in which the taxpayer must acquire the replacement property (or sell its relinquished property in a reverse exchange) have been extended. If the deadline for either of these periods currently ends after March 31, 2020, the deadline is automatically extended to July 15, 2020.
IRS Notice 2020-23 also extends the 180-day investment period for making a qualifying investment in an Opportunity Zone Fund. If the180-day period currently ends after March 31, 2020, the period is automatically extended until July 15, 2020.
It is also important to keep in mind that there is generally a 31-month safe harbor for working capital held by a qualified opportunity zone business. There are existing regulations that allow this period to be extended by 24 months if the business is located in an opportunity zone within a federally declared disaster area. Because the entire United States has been declared a federally declared disaster area, the working capital safe harbor may be extended from 31 to 55 months for Opportunity Zone projects nationwide.
Gourjian Law Group remains informed on all IRS related updates and is readily available to help clients manage their Section 1031 exchanges and/or opportunity zone funds. As the Coronavirus pandemic continues to force regulations and deadlines to adjust, it is important to have an experienced team advising you. Please don’t hesitate to reach out.
Contact us at (818) 956-0100, or visit our website to learn more about our practice and fill out a contact form.