On April 9, the Internal Revenue Service (IRS) and Department of Treasury issued additional taxpayer extensions in response to the COVID-19 pandemic. These extensions include a delay of deadlines required for 1031 like-kind exchanges and investments in Qualified Opportunity Zones.
During a federally declared disaster, the Secretary of Treasury is granted authority to postpone taxpayer acts. The first federal taxpayer extension was issued on March 18, 2020. This action postponed federal income tax payments from April 15 until July 15.
Subsequently, investors participating in like-kind exchanges or Opportunity Zone investments with deadlines that fall between April 1 and July 15, will have until July 15 to meet the specific deadline.
For like-kind exchanges, this means if either the 45-day property identification or the 180-day exchange period fell between April 1 or July 15, the new deadline is July 15.
Opportunity Zone investments due between April 1 and July 14, will have until July 15 to roll over the gain into a Qualified Opportunity Zone Fund. Under normal circumstances investors have 180 days from when they sold the asset to make the Opportunity Zone investment.
Another extension for real estate professionals includes changes to quarterly filing dates for sole proprietors. The second quarter filing would normally be due June 15; however, it is now due July 15. It is important to note the first quarter filing was extended to July 15 under the first round of federal tax filing extensions. This round of extensions clarifies that both the first and second quarter filing are due July 15.