The IRS recently released updated disaster extensions impacting most counties in California. Not only does this update delay the tax filing deadline to October 16, 2023, but it could also extend investors' 1031 exchange deadlines until October 16, 2023.
If you are a resident of or have your principal place of business in California, you may be considered an “affected taxpayer” that is eligible to significantly extend the 1031 exchange timelines.
For example: Typically, if you were to close your investment property on April 1st, you would have until May 16th to identify a replacement property and September 28th to close (45 and 180 days, respectively).
With this recent extension, however, you will now have until October 16th to both identify AND close the acquisition of your replacement property, allowing those doing 1031 exchanges to take more time to complete due diligence on properties they plan to purchase and potentially take advantage of lower interest rates (if rates decrease later in the year).
Experts in the exchange industry expect to see investors increasingly taking advantage of this limited opportunity to list and sell investment properties and exchange into a better-performing assets with several months to identify and complete the purchase.
Contact us at HFO to learn more and stay tuned for our upcoming HFO-TV interview with Milissa Ormiston-Hall, vice president for Oregon / SW Washington in IPX1031's Northwest Regional Office, where we dig further into the advantages of completing an exchange in 2023.
Read more at IRS.gov
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