The IRS recently issued Notices IA-2024-04 for portions of Iowa, KY-2024-02 for portions of Kentucky, and WV-2024-03 for portions of West Virginia, that provide extensions of many time-sensitive tax deadlines, including 1031 deadlines pursuant to IRS Revenue Procedure 2018-58 (Rev. Proc.).

For all of these disaster declarations, Section 6 of the Rev. Proc. allows certain taxpayers to extend certain 1031 deadlines to November 1, 2024, and Section 17 of the Rev. Proc. allows certain taxpayers to extend certain 1031 deadlines to November 1, 2024 or 120 days – whichever is later (however, this section 17 extension cannot go beyond one year or the due date for the taxpayer’s tax return for the year of the sale, as extended). 

As of June 7, 2024, the disaster areas for these disaster declarations are:  (1) Adair, Montgomery, Polk, and Story counties, Iowa (2) Boyd, Carter, Fayette, Greenup, Henry, Jefferson, Jessamine, Mason, Oldham, Union, and Whitley counties, Kentucky; and (3) Boone, Brooke, Cabell, Fayette, Hancock, Kanawha, Lincoln, Marshall, Nicholas, Ohio, Preston, Putnam, Tyler, Wayne and Wetzel counties, West Virginia.

Taxpayers meeting the definition of “Affected Taxpayer” are eligible for both the Section 6 and Section 17 extensions, regardless of the relinquished property and/or replacement property location and must choose which extension option to proceed under. The definition of “Affected Taxpayer” includes individuals who live, and businesses whose principal place of business is located, in the covered disaster area. The Section 17 extension is also available to taxpayers who are having difficulty meeting their 1031 deadlines due to the disaster (See Rev. Proc. Section 17.02(b)(ii) for examples of such “difficulty”).

For a more detailed explanation of the Disaster Relief extensions click here: apiexchange.com/disaster-relief/

All disaster declarations for which the IRS has provided an extension of 1031 deadlines can be found here: https://www.irs.gov/newsroom/tax-relief-in-disaster-situations

Taxpayers should consult their tax advisor to determine their eligibility for an extension and alert their Exchange Counselor as soon as possible of any extended 1031 deadlines.