IRS Extends 1031 Exchange Deadlines for Hurricane-Affected Investors

In October 2024, the IRS announced deadline extensions for 1031 exchange transactions in light of Hurricanes Helene and Milton. This provides crucial relief for taxpayers in affected states, including Florida, Alabama, Georgia, North Carolina, South Carolina, Tennessee, and Virginia.

Under the announcement, the key 45-day identification period and 180-day replacement property acquisition deadlines for 1031 exchanges have been extended to May 1, 2025. This extension applies to impacted individuals and businesses with deadlines that originally fell on or after the respective disaster dates for their states, ranging from September 22 to September 26, 2024.

Relief Options Explained

There are two relief options under Revenue Procedure 2018-58:

• Section 6 provides direct extensions for taxpayers within the disaster area to May 1, 2025.
• Section 17 applies to those affected indirectly, offering a later deadline of either 120 days from the original deadline or May 1, 2025, depending on specific circumstances.

These extensions apply even if the exchange property is outside the disaster area, provided the taxpayer is directly or indirectly impacted.

What Should You Do?

If you’re involved in either a forward or reverse 1031 exchange and believe you qualify, consult with our Northmarq Exchange experts or your tax advisor immediately. Eligibility and application of these relief options can be complex, and a professional can help ensure you're maximizing the benefits while staying compliant.