California residents and real estate investors looking to begin a 1031 exchange are being encouraged to act now, according to Peak 1031 Exchange.
The recent IRS extensions allow qualifying California taxpayers to extend any exchange deadline that falls after January 8, 2023 out to October 16, 2023. This gives qualifying taxpayers a much longer identification period, creating more opportunities for tax savings on real estate investment property.
For example, a taxpayer who closes on the sale of their relinquished property on April 3, 2023, would normally have a 45-day identification deadline of May 18, 2023, and a 180-day exchange deadline of September 30, 2023. However, because of these extensions, this same taxpayer would have both of their exchange deadlines extended to October 16, 2023. This effectively means that such a taxpayer would have no identification deadline since their exchange deadline falls on the same date. Even for qualifying taxpayers who close on their relinquished property months from now, they still get the benefit of a much longer identification period than the usual 45 days, as their identification deadline would be pushed out to October 16, 2023.
“We are excited to see the recent extensions issued by the IRS for 1031 exchange deadlines,” says Kevin M. Levine, Executive Vice President & Partner at Peak 1031 Exchange (peakexchange.com), a lCalifornia-based 1031 exchange service provider. “This is truly a rare opportunity for eligible California taxpayers to maximize their tax savings on the sale of their investment property and take advantage of a much longer identification period. As always, we always tell our clients that they must speak with a tax advisor to determine eligibility for the extension and new deadlines.”
Click here for more information regarding this extension from the IRS.