Category: Company and Industry News

March 31st we posted a blog providing detailed information regarding a request from a coalition of interested real estate groups to the IRS to provide some relief to taxpayers on mandated exchange deadlines.  On April 9, 2020, the IRS issued https://www.irs.gov/pub/irs-drop/n-20-23.pdf”>Notice 2020-23 Providing Additional Relief for Taxpayers Affected by the COVID-19 Pandemic.  Affected Taxpayers performing Section 1031 exchanges are included in the amplified relief.  Among other subjects, this Notice extends the 45-day identification period and the 180-day exchange period for taxpayer/exchangers whose deadlines were due on or after April 1, 2020. The deadlines for those exchangers to identify replacement property and/or acquire replacement property are now July 15, 2020.  It is important to note there is no retroactive effect if a taxpayer’s 45-day identification deadline and 180-day exchange period ended before April 1, 2020.  Many expected the relief would be retroactive to an earlier time when the effect of the virus was making adherence to the deadlines difficult but such is not the case.
Section 1031 rules require potential replacement properties to be timely identified on or before midnight of the 45th day following the sale of the relinquished property.  The taxpayer must then close on the purchase of the designated replacement property within 180 days of the relinquished property sale. 
Accruit has previously provided a summary of the rules pertaining to extensions of exchange transactions due to federally declared disasters. However, Notice 2020-23 is somewhat confusing to taxpayers and their professionals because it is not written like previous Disaster Relief Notices.  Particularly, Notice 2020-23 does not expressly reference Section 17 of Rev. Proc. 2018-58.  In the absence of an express reference to Section 17, it appears the normal 120-day extension from the date of the federally declared disaster does not apply to the current COVID-19 pandemic. 
While this may not be the relief for which many taxpayers hoped, Accruit is thankful the IRS acted quickly on the letter request directed to IRS/Treasury in late March by the coalition including the https://www.1031.org/”>Federation of Exchange Accommodators (FEA), of which Accruit is a member.  At this time we don’t know whether Notice 2020-23 will be the final guidance the IRS issues related to the 45-day identification period and the 180-day exchange period.  Though the Notice provides some relief to taxpayers with pending exchanges,  several issues are left unresolved or unclear.  Accruit’s representatives on the Government Affairs Committee of the FEA, are working with others to seek clarification regarding some of the open items and possibly request the IRS change the start date of the extension to January 20, 2020 (the date of the FEMA disaster declaration) or March 13, 2020 (the date of the Stafford Act/FEMA declaration). 
If you have any specific questions about this relief, please contact your client service person at Accruit.  The information contained in this article is not to be considered tax or legal advice and taxpayers should consult independent counsel with regard to the particular matter; however, Accruit will continue to monitor the situation closely and share any information on further extensions or modifications as soon as they become available. You may also continue to check on Accruit’s website for any further updates.

March 31st we posted a blog providing detailed information regarding a request from a coalition of interested real estate groups to the IRS to provide some relief to taxpayers on mandated exchange deadlines.  On April 9, 2020, the IRS issued https://www.irs.gov/pub/irs-drop/n-20-23.pdf”>Notice 2020-23 Providing Additional Relief for Taxpayers Affected by the COVID-19 Pandemic.  Affected Taxpayers performing Section 1031 exchanges are included in the amplified relief.  Among other subjects, this Notice extends the 45-day identification period and the 180-day exchange period for taxpayer/exchangers whose deadlines were due on or after April 1, 2020. The deadlines for those exchangers to identify replacement property and/or acquire replacement property are now July 15, 2020.  It is important to note there is no retroactive effect if a taxpayer’s 45-day identification deadline and 180-day exchange period ended before April 1, 2020.  Many expected the relief would be retroactive to an earlier time when the effect of the virus was making adherence to the deadlines difficult but such is not the case.
Section 1031 rules require potential replacement properties to be timely identified on or before midnight of the 45th day following the sale of the relinquished property.  The taxpayer must then close on the purchase of the designated replacement property within 180 days of the relinquished property sale. 
Accruit has previously provided a summary of the rules pertaining to extensions of exchange transactions due to federally declared disasters. However, Notice 2020-23 is somewhat confusing to taxpayers and their professionals because it is not written like previous Disaster Relief Notices.  Particularly, Notice 2020-23 does not expressly reference Section 17 of Rev. Proc. 2018-58.  In the absence of an express reference to Section 17, it appears the normal 120-day extension from the date of the federally declared disaster does not apply to the current COVID-19 pandemic. 
While this may not be the relief for which many taxpayers hoped, Accruit is thankful the IRS acted quickly on the letter request directed to IRS/Treasury in late March by the coalition including the https://www.1031.org/”>Federation of Exchange Accommodators (FEA), of which Accruit is a member.  At this time we don’t know whether Notice 2020-23 will be the final guidance the IRS issues related to the 45-day identification period and the 180-day exchange period.  Though the Notice provides some relief to taxpayers with pending exchanges,  several issues are left unresolved or unclear.  Accruit’s representatives on the Government Affairs Committee of the FEA, are working with others to seek clarification regarding some of the open items and possibly request the IRS change the start date of the extension to January 20, 2020 (the date of the FEMA disaster declaration) or March 13, 2020 (the date of the Stafford Act/FEMA declaration). 
If you have any specific questions about this relief, please contact your client service person at Accruit.  The information contained in this article is not to be considered tax or legal advice and taxpayers should consult independent counsel with regard to the particular matter; however, Accruit will continue to monitor the situation closely and share any information on further extensions or modifications as soon as they become available. You may also continue to check on Accruit’s website for any further updates.

IRS Notice 2020-23 Provides Some Relief for Taxpayers Affected by the COVID-19 Pandemic
On April 9, 2020, the Federation of Exchange Accommodators, of which Accruit is a member. If you have any specific questions about this relief, please contact your client service person at Accruit by calling 800-237-1031.
Read more about why this

IRS Notice 2020-23 Provides Some Relief for Taxpayers Affected by the COVID-19 Pandemic
On April 9, 2020, the Federation of Exchange Accommodators, of which Accruit is a member. If you have any specific questions about this relief, please contact your client service person at Accruit by calling 800-237-1031.
Read more about why this

IRS Notice 2020-23 Provides Some Relief for Taxpayers Affected by the COVID-19 Pandemic
On April 9, 2020, the Federation of Exchange Accommodators, of which Accruit is a member. If you have any specific questions about this relief, please contact your client service person at Accruit by calling 800-237-1031.
Read more about why this

Accruit, LLC is closely monitoring any 1031 exchange deadline extensions due to COVID-19 on both a state and federal level through the Department of Treasury and IRS. 
On March 23, 2020, a real estate coalition, including but not limited to, the Federation of Exchange Accommodators (FEA), of which Accruit is a Board level member, sent a joint letter to Treasury Secretary Steven Mnuchin and other policy makers at the Treasury Department and IRS requesting guidance to delay the deadlines applicable to 1031 like-kind exchanges that are currently underway due to the COVID-19 crisis. The signatories to the joint letter dated March 23 include twenty-one associations representing a broad spectrum of the real estate industry, such as qualified intermediaries, property owners and operators, investors, lenders, title insurers and closers, realtors and others concerning all asset classes. The March 23 joint letter specifically requests that deadlines to identify replacement property and/or complete like-kind exchanges should be extended to the later of 120 days or to the last day of the general disaster extension period authorized by an IRS News Release or other guidance, similar to the relief described in Section 17 of Rev. Proc. 2018-58 and authorized under IRC § 7508A which has been historically used for regions hit by natural disasters like tornadoes or hurricanes.
Also, IRS Notice 2020-18 automatically extended the time for filing of federal tax returns and payment of federal income tax payments to July 15, 2020. This Notice expands the extension to any Taxpayer (including individuals and entities) that have a federal tax payment or a federal income tax return due April 15, 2020. Affected Taxpayers do not have to file Forms 4868 or 7004 to receive the extension, and there is no limitation on the amount of the payment that may be postponed.
On a state level, California was the first to take action. The California Franchise Tax Board (CA FTB) has

Accruit, LLC is closely monitoring any 1031 exchange deadline extensions due to COVID-19 on both a state and federal level through the Department of Treasury and IRS. 
On March 23, 2020, a real estate coalition, including but not limited to, the Federation of Exchange Accommodators (FEA), of which Accruit is a Board level member, sent a joint letter to Treasury Secretary Steven Mnuchin and other policy makers at the Treasury Department and IRS requesting guidance to delay the deadlines applicable to 1031 like-kind exchanges that are currently underway due to the COVID-19 crisis. The signatories to the joint letter dated March 23 include twenty-one associations representing a broad spectrum of the real estate industry, such as qualified intermediaries, property owners and operators, investors, lenders, title insurers and closers, realtors and others concerning all asset classes. The March 23 joint letter specifically requests that deadlines to identify replacement property and/or complete like-kind exchanges should be extended to the later of 120 days or to the last day of the general disaster extension period authorized by an IRS News Release or other guidance, similar to the relief described in Section 17 of Rev. Proc. 2018-58 and authorized under IRC § 7508A which has been historically used for regions hit by natural disasters like tornadoes or hurricanes.
Also, IRS Notice 2020-18 automatically extended the time for filing of federal tax returns and payment of federal income tax payments to July 15, 2020. This Notice expands the extension to any Taxpayer (including individuals and entities) that have a federal tax payment or a federal income tax return due April 15, 2020. Affected Taxpayers do not have to file Forms 4868 or 7004 to receive the extension, and there is no limitation on the amount of the payment that may be postponed.
On a state level, California was the first to take action. The California Franchise Tax Board (CA FTB) has

Accruit, LLC is closely monitoring any 1031 exchange deadline extensions due to COVID-19 on both a state and federal level through the Department of Treasury and IRS. 
On March 23, 2020, a real estate coalition, including but not limited to, the Federation of Exchange Accommodators (FEA), of which Accruit is a Board level member, sent a joint letter to Treasury Secretary Steven Mnuchin and other policy makers at the Treasury Department and IRS requesting guidance to delay the deadlines applicable to 1031 like-kind exchanges that are currently underway due to the COVID-19 crisis. The signatories to the joint letter dated March 23 include twenty-one associations representing a broad spectrum of the real estate industry, such as qualified intermediaries, property owners and operators, investors, lenders, title insurers and closers, realtors and others concerning all asset classes. The March 23 joint letter specifically requests that deadlines to identify replacement property and/or complete like-kind exchanges should be extended to the later of 120 days or to the last day of the general disaster extension period authorized by an IRS News Release or other guidance, similar to the relief described in Section 17 of Rev. Proc. 2018-58 and authorized under IRC § 7508A which has been historically used for regions hit by natural disasters like tornadoes or hurricanes.
Also, IRS Notice 2020-18 automatically extended the time for filing of federal tax returns and payment of federal income tax payments to July 15, 2020. This Notice expands the extension to any Taxpayer (including individuals and entities) that have a federal tax payment or a federal income tax return due April 15, 2020. Affected Taxpayers do not have to file Forms 4868 or 7004 to receive the extension, and there is no limitation on the amount of the payment that may be postponed.
On a state level, California was the first to take action. The California Franchise Tax Board (CA FTB) has

Accruit board member Joseph Lane was named vice chairman of Read the full article in the Monitor Daily.

Accruit board member Joseph Lane was named vice chairman of Read the full article in the Monitor Daily.