IRS Extends Like Kind Exchange Deadlines

Pursuant to Notice 2020-23, issued April 9, 2020, the IRS extended numerous tax related deadlines, providing relief for a variety of time sensitive actions due to be performed from April 1, 2020 to July 15, 2020.  Included in the relief were extensions to the 45 day identification (the “45 Day Identification Period”) and 180 day exchange period (the “180 Day Exchange Period”) relating to like-kind exchanges under Section 1031 of the Internal Revenue Code.

Accordingly, for those taxpayers having a 45 Day Identification Period or 180 Day Exchange Period that ends between April 1, 2020 and July 15, 2020, the applicable period is automatically extended until July 15, 2020. Taxpayers are permitted to “opt out” of the extension; otherwise, the extension will automatically apply. Notably, Notice 2020-23 does not extend deadlines falling outside of the foregoing time period. Given federal disaster declarations dated March 13, 2020 (pursuant to FEMA and Stafford Act declarations) and January 20, 2020 (pursuant to a FEMA disaster declaration), it remains unclear whether the IRS will provide additional extensions for 45 Day Identification Periods and/or 180 Day Exchange Periods expiring under Section 1031 before or after these time periods. Until those extensions are expressly granted, taxpayers would be well advised to assume that no extension will apply in those circumstances.