Advocacy

Accruit has always advocated for the preservation of 1031 exchange. Exchanges provide economic stimulus on the local level, which is especially important in times of economic uncertainty such as these. As members of the Federation of Exchange Administrators (FEA), Accruit is an active participant in the work that is being done to preserve Section 1031 of the Internal Revenue Code. The FEA is incredibly important to our industry and we are proud to be members and support the work they are doing.

The IRS has issued extensions of exchange transactions under the guidelines set forth around federally declared disasters in Utah and Michigan. Accruit suggests that affected taxpayers consult with their tax and legal professionals as well as confirm on IRS website for any updates.

Accruit and its clients have been focused on July 15^th for the past few months. That is the extended deadline to either identify their replacement properties or acquire their replacement properties to complete a 1031 exchange transaction. We published a blog post on the IRS Extension Notice 2020-23 in April. Accruit and many others involved in the real estate industry were concerned about the need for clarification of portions of the Notice and we are still awaiting that clarification. Some benefited from the extension but others were forced to wait for distribution of exchange funds due to the wording of the Notice.

Many of our clients who were in the middle of their 1031 exchanges in early April probably hoped that issues created by the COVID-19 pandemic would be behind us by now. However, it is clear the reasons for the deadline extensions still abound.

Property owners and investors continue to deal with travel restrictions, property inspection delays, problems in viewing replacement properties, appraisal and financing delays, finding enough suitable replacement property inventory, etc. All...

The FEA issued its second joint letter dated April 20, 2020 requesting clarity on the 1031 exchange1031 exchange deadlines per IRS Notice 2020-23. The ambiguity of the Notice has left questions regarding pertinent details, such as if this deadline extension is mandatory, or simply available for those who need more time to complete their 1031 exchange.