With so many weather-related natural disasters occurring with seemingly increasing frequency, let’s take a look at how such disasters affect persons seeking to complete exchange transactions. While the safe harbor timelines for conventional forward exchanges and for reverse exchanges are strictly enforced, there is some relief afforded in the event of a federally declared disaster in the form of time granted. The applicability of a particular federally declared disaster can be found on the IRS website, which provides news releases covering disaster events.
An IRS publication, IRS Revenue Procedure 2007-56 Section 17, sets forth the rules surrounding such disasters as they apply to forward and reverse exchanges. This revenue procedure states that the last day of the 45-day identification period, the last day of the 180-day exchange period for forward exchanges and the beginning and end dates for a reverse exchange can be extended. More specifically, those dates are postponed to the later of (i) 120 days or (ii) the last day of the general disaster period authorized in the IRS News Release....