Days after NMHC spearheaded a coalition asking Treasury Department to take administrative action to delay deadlines applicable to like-kind exchanges that are currently underway, the Internal Revenue Service (IRS) announced a rule that lines up with industry requests.
The IRS guidance enacts the following provisions:
- Taxpayers whose 45-day deadline to identify a replacement like-kind exchange property or whose 180-day deadline to close a like-kind exchange transaction expires on or after April 1 now have until July 15 to meet these deadlines. For example, a taxpayer whose 45-day identification period ends on April 15 now has until July 15 to identify replacement property. A taxpayer who has a May 15 deadline to close a transaction under the 180-day rule now has until July 15 to complete the transaction.
- NMHC is exploring whether the more generous like-kind exchange relief provided by Rev. Proc. 2018-58, which the IRS can turn to in times of disaster, was activated by yesterday’s announcement. If so, the 45-day and 180-day deadlines for identifying and closing on like-kind exchanges would be postponed by 120 days.
- Finally, taxpayers who face a 180-day deadline expiring on or after April 1 to invest capital gains into an Opportunity Fund now have until July 15 to make such an investment.
In addition to April 15 estimated tax payments being due on July 15, the same is now true for second quarter payments previously due on June 15.
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