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IRS Extends Time Periods for Section 1031 Exchanges Due to Covid-19

GREAT NEWS: The Internal Revenue Service has approved welcomed relief for 1031 Exchangers who, as result of COVID-19 related challenges, were struggling to meet previously published timelines for identifying and concluding acquisition of “like-kind” replacement properties.

On April 9, 2020, the IRS published Notice 2020-23 (the “Notice”), which provides that the former 1031 Exchange 45-day identification and 180-day acquisition deadlines that fall on or after April 1, 2020 can be extended to July 15, 2020. Identification and acquisition deadlines that took place prior to April 1, or are scheduled for after July 15, will remain unaffected.

The most important take-away for any rental property owners who are engaged in or planning for a 1031 Exchange whose 45-day identification period or 180-day closing period initially occurred on or after April 1 and before July 15, 2020, is that they may now have up to July 15, 2020, to either identify their replacement property or close on their transaction.

Here are two examples to illustrate the current extension.

Example 1: Exchange began April 1, 2020. 45th day is May 16, which would be extended to July 15, 2020. Taxpayer must still close on replacement property by Sept 28, which is the 180th day; because Sept 28 is after the last day of the disaster period (July 15).

Example 2: Exchange began Dec 31, 2019, 45th day is Feb 14, 2020. ID period is not extended because it is before April 1. The 180th day is June 28, which would be extended to July 15, 2020.

What about the impact on state taxes?

Rental property owners should verify with a qualified tax advisor that their tax obligations to states in which they reside or where their property is located have also been extended to conform to the IRS Notice. If this is not clear-cut (and it may not be due to delays in states reacting to the Notice), a tax advisor may recommend that rental property owners adhere to the traditional 45/180 day deadlines and only take advantage of any extensions at the state level when appropriate notices have been provided.

Is there a benefit to identifying and/or acquiring replacement properties prior to July 15th?

The option to extend 1031 Exchange deadlines is voluntary and, as prior to the Notice, if a rental property owner finds advantages in completing their 1031 Exchange requirements prior to July 15th (e.g., to begin receiving rental income from the replacement property, to begin needed repairs, etc.), they are free to do so.

What if the County Recorder's Office closes or falls behind on recordings?

COVID-19 shelter in place regulations have impacted the ability of many local county recording offices to complete timely recording of property transfers. With respect to 1031 Exchanges, the transfer of one property to another generally is completed when the terms of the purchase and sale agreement have been satisfied and the buyer receives possession of the replacement property. The recording of a deed by the county recorder formally documents what has already happened when ownership was transferred and delays in recording process should not impact 1031 Exchange.

We encourage all exchangers to promptly discuss the qualifications for an extension, as well as the benefits and/or drawbacks to an extension with their legal and/or tax advisor. If, after such consultation, there is a benefit and desire to take advantage of an extension to July 15, First Guardian Group is available to assist.

To learn more about this topic, please visit our Events page to sign up for our latest webinar!

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We are open for business and stand ready to assist with your exchange transaction. If you need a personal exchange consultation, we are happy to schedule a conference call at a time that works with your schedule and situation.
Please do not hesitate to contact us with your questions or concerns in these uncertain times. We look forward to hearing from you.

For more information or to schedule a consultations, please contact us at 408 392-8822 or via email at



2. But not beyond the due date (including extensions) of the taxpayer’s tax return for the year of transfer. 



IRS Notice 2020-23:


Paul Getty

Paul Getty is a licensed real estate broker in the state of California and Texas and has been directly involved in commercial transactions totaling over $3 billion on assets throughout the United States. His experience spans all major asset classes including retail, office, multifamily, and student, and senior housing. Paul’s transaction experience includes buy and sell side representation, sourcing and structuring of debt and equity, workouts, and asset and property management. He has worked closely with nationally prominent real estate brokerage and investment organizations including Marcus Millichap, CB Richard Ellis, JP Morgan, and Morgan Stanley among others on the firm’s numerous transactions. Paul also maintains a broad network of active buyers and sellers of commercial real estate including lenders, institutions, family office managers, and high net worth individuals. Prior to founding First Guardian Group/FGG1031, Paul was a founder and CEO of Venture Navigation, a boutique investment banking firm specializing in structuring equity investments made by institutions and high net worth individuals. He possesses over 35 years of comprehensive worldwide business management experience in environments ranging from early phase start-ups to multi-billion-dollar corporations. His track record includes participation in IPOs and successful M&A activity that has resulted in investor returns of over $700M. Paul holds an MBA in Finance from the University of Michigan, graduating with honors, and a Bachelor’s Degree in Chemistry from Wayne State University. Paul Getty holds Series 22, 62, and 63 securities licenses and is a registered financial representative with LightPath Capital Inc, member FINRA /SIPC. Paul is a noted speaker, author, and actively lectures on investments, sales, and management related topics. He is author of The 12 Magic Slides, Regulation A+: How the JOBS Act Creates Opportunities for Entrepreneurs and Investors, and Tax Deferral Strategies Utilizing the Delaware Statutory Trust (DST), available on Amazon and other retail outlets.

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