<p>March 31st we <a href="/blog/extension-1031-exchange-deadlines-due-covid-19-crisis">posted a blog providing detailed information regarding a request from a coalition of interested real estate groups to the IRS</a> to provide some relief to taxpayers on mandated exchange deadlines. &nbsp;On April 9, 2020, the IRS issued <a href="https://www.irs.gov/pub/irs-drop/n-20-23.pdf">Notice 2020-23 Providing Additional Relief for Taxpayers Affected by the COVID-19 Pandemic</a>.&nbsp; Affected Taxpayers performing Section 1031 exchanges are included in the amplified relief.&nbsp; Among other subjects, this Notice extends the 45-day identification period and the 180-day exchange period for taxpayer/exchangers whose deadlines were due on or after April 1, 2020. The deadlines for those exchangers to identify replacement property and/or acquire replacement property are now July 15, 2020.&nbsp; It is important to note there is no retroactive effect if a taxpayer’s 45-day identification deadline and 180-day exchange period ended before April 1, 2020.&nbsp; Many expected the relief would be retroactive to an earlier time when the effect of the virus was making adherence to the deadlines difficult but such is not the case.</p>

<p>Section 1031 rules require potential replacement properties to be timely identified on or before midnight of the 45th day following the sale of the relinquished property.&nbsp; The taxpayer must then close on the purchase of the designated replacement property within 180 days of the relinquished property sale.&nbsp;</p>

<p>Accruit has <a href="/blog/how-federally-declared-disasters-affect-1031-exchanges">previously provided a summary of the rules</a> pertaining to extensions of exchange transactions due to federally declared disasters.&nbsp;However, Notice 2020-23 is somewhat confusing to taxpayers and their professionals because it is not written like previous Disaster Relief Notices.&nbsp; Particularly, Notice 2020-23 does not expressly reference Section 17 of Rev. Proc. 2018-58.&nbsp; In the absence of an express reference to Section 17, it appears the normal 120-day extension from the date of the federally declared disaster does not apply to the current COVID-19 pandemic.&nbsp;</p>

<p>While this may not be the relief for which many taxpayers hoped, Accruit is thankful the IRS acted quickly on the letter request directed to IRS/Treasury in late March by the coalition including the <a href="https://www.1031.org/">Federation of Exchange Accommodators (FEA)</a>, of which Accruit is a member.&nbsp; At this time we don’t know whether Notice 2020-23 will be the final guidance the IRS issues related to the 45-day identification period and the 180-day exchange period.&nbsp; Though the Notice provides some relief to taxpayers with pending exchanges, &nbsp;several issues are left unresolved or unclear.&nbsp; Accruit’s representatives on the Government Affairs Committee of the FEA, are working with others to seek clarification regarding some of the open items and possibly request the IRS change the start date of the extension to January 20, 2020 (the date of the FEMA disaster declaration) or March 13, 2020 (the date of the Stafford Act/FEMA declaration).&nbsp;</p>

<p>If you have any specific questions about this relief, please contact your client service person at Accruit.&nbsp; The information contained in this article is not to be considered tax or legal advice and taxpayers should consult independent counsel with regard to the particular matter; however, Accruit will continue to monitor the situation closely and share any information on further extensions or modifications as soon as they become available. You may also continue to check on Accruit’s website for any further updates.</p>

<h2>IRS Notice 2020-23 Provides Some Relief for Taxpayers Affected by the COVID-19 Pandemic</h2>

<p>On April 9, 2020, the <a href="https://www.irs.gov/pub/irs-drop/n-20-23.pdf&quot; target="_blank">IRS issued Notice 2020-23</a> Providing Additional Relief for Taxpayers Affected by the COVID-19 Pandemic. Affected Taxpayers performing Section 1031 exchanges are included in the amplified relief. Among other subjects, this Notice extends the 45-day identification period and the 180-day exchange period for taxpayer/exchangers whose deadlines were due on or after April 1, 2020. The deadlines for those exchangers to identify replacement property and/or acquire replacement property are now July 15, 2020. It is important to note that there is no retroactive effect if the 45-day identification deadline and 180-day exchange period were before April 1, 2020.</p>

<p>While this may not be the relief for which many taxpayers may have hoped, Accruit is thankful the IRS acted quickly on the letter request directed to IRS/Treasury in late March by a coalition of many traded associations including the <a href="https://www.1031.org/&quot; target="_blank">Federation of Exchange Accommodators</a>, of which Accruit is a member. If you have any specific questions about this relief, please contact your client service person at Accruit by calling 800-237-1031.</p>

<p>Read more about why this <a href="https://www.accruit.com/blog/extension-1031-exchange-deadlines-due-covi…; target="_blank">deadline extension request was made</a>. Accruit continues to monitor <a href="/services/1031-exchange">1031 exchange</a> deadline extensions due to COVID-19 on both a state and federal level through the Department of Treasury and IRS.</p>

<h2>Accruit, LLC is closely monitoring any 1031 exchange deadline extensions due to COVID-19 on both a state and federal level through the Department of Treasury and IRS.&nbsp;</h2>

<p>On March 23, 2020, a real estate coalition, including but not limited to, the Federation of Exchange Accommodators (FEA), of which Accruit is a Board level member, sent a <a aria-label="Letter to Department of Treasury" href="/sites/default/files/Real Estate Letter to Treasury Requesting Like-Kind Exchange Deadline Relief.pdf" target="_blank" title="Letter to Department of Treasury">joint letter to Treasury Secretary Steven Mnuchin</a> and other policy makers at the Treasury Department and IRS requesting guidance to delay the deadlines applicable to 1031 like-kind exchanges that are currently underway due to the COVID-19 crisis. The signatories to the joint letter dated March 23 include twenty-one associations representing a broad spectrum of the real estate industry, such as qualified intermediaries, property owners and operators, investors, lenders, title insurers and closers, realtors and others concerning all asset classes. The March 23 joint letter specifically requests that deadlines to identify replacement property and/or complete like-kind exchanges should be extended to the later of 120 days or to the last day of the general disaster extension period authorized by an IRS News Release or other guidance, similar to the relief described in Section 17 of Rev. Proc. 2018-58 and authorized under IRC § 7508A which has been historically used for regions hit by natural disasters like tornadoes or hurricanes.</p>

<p>Also, <a aria-label="Notice 2020-18 Covid Relief" href="/sites/default/files/Notice%202020-18%20postponement%20of%20filing%20%20payment%20of%202019%20tax%20returns.pdf" target="_blank" title="Notice 2020-18 Covid Relief">IRS Notice 2020-18</a> automatically extended the time for filing of federal tax returns and payment of federal income tax payments to July 15, 2020. This Notice expands the extension to any Taxpayer (including individuals and entities) that have a federal tax payment or a federal income tax return due April 15, 2020. Affected Taxpayers do not have to file Forms 4868 or 7004 to receive the extension, and there is no limitation on the amount of the payment that may be postponed.</p>

<p>On a state level, California was the first to take action. The California Franchise Tax Board (CA FTB) has <a href="https://www.ftb.ca.gov/about-ftb/newsroom/news-releases/2020-3-state-po…; target="_blank">extended the due dates</a> for multiple taxes, including non-wage withholding, to July 15, 2020 due to COVID-19. This extension includes the filing of Form 593 and payment of real estate withholding per Form 593-V.</p>

<p>The signatories of the joint March 23 letter are awaiting written guidance from the IRS in response to the request for extensions. Currently, the regular deadlines remain in place. The disaster provisions have been used many times to extend 1031 guidelines in the past, and we are hopeful the IRS will fall back on the existing procedures once it issues formal guidance. We are keenly aware that it is hard to be patient; however, this is an unprecedented upheaval for every sector.</p>

<p>Relief for our 1031 exchange clients is paramount to all of us. Although the information contained in this article is not to be considered tax or legal advice and taxpayers should consult independent counsel with regard to the particular matter, Accruit will timely respond to our clients with any questions about their pending exchanges, continue to monitor the situation very closely and share any information on extensions as soon as it becomes available. You may continue to check on Accruit’s website for any further updates.</p>

<p>Accruit board member <a href="/about-us/board-directors#joe">Joseph Lane</a> was named vice chairman of <a href="http://www.napierparkglobal.com/&quot; target="_blank">Napier Park Global Capital</a> and appointed to the firm's leadership team as a member of the Management Committee.</p>

<p>A managing director in Napier Park's Real Assets group, Joe has over 35 years of experience in financial services. He has previously served as CEO of GE Technology Finance and as president of IBM Credit Corporation. Joe has been director and chairman of the Equipment Leasing and Finance Association (ELFA), and chairman of the Equipment Leasing and Finance Foundation. He was elected to the Equipment Finance Hall of Fame in 2015.</p>

<p><a href="https://www.monitordaily.com/news-posts/lane-named-vice-chairman-of-nap…; target="_blank">Read the full article in the Monitor Daily</a>.</p>

<p>In the event of a federally-declared disaster, the IRS will provide relief to taxpayers in the form of extensions on the 180-day exchange period and 45-day identification period rules. Notice of such relief is posted on this IRS web page:</p>

<p><a href="https://www.irs.gov/newsroom/tax-relief-in-disaster-situations&quot; target="_blank">Tax Relief in Disaster Situations</a></p>

<p>Specifics of the tax relief being provided for victims of Hurricane Florence can be found here:</p>

<p><a href="https://www.irs.gov/newsroom/help-for-victims-of-hurricane-florence&quot; target="_blank">www.irs.gov/newsroom/help-for-victims-of-hurricane-florence</a></p&gt;

<p><strong>DENVER, CO – </strong>Accruit, a financial technology company and leader in the 1031 like-kind exchange industry, has acquired Montana-based American Equity Exchange, founded in 1991 by 1031 veteran, Max A. Hansen. Hansen will join Accruit as an Executive Vice President and continue serving exchange clients from his Montana location.</p>

<p>“American Equity Exchange has contributed significantly to our industry growth and advocacy over the past two decades,” said Accruit CEO Brent Abrahm. “We’re very excited to be joining forces with Max and his seasoned team and growing Accruit’s portfolio of services for our customers.”</p>

<p>In addition to his role as President and CEO of American Equity Exchange, Hansen is an attorney who has practiced law in Montana since 1976. He is a member of the State Bar Associations of California, Utah, Idaho and Montana. He has served multiple terms as the State Bar Delegate and ABA Delegate to the American Bar Association House of Delegates. He is also a long time member of the Tax Section of the ABA and its Sales Exchanges and Basis Committee.&nbsp; Hansen’s work in real estate law and 1031 exchanges led to his founding in 1991 of American Equity Exchange, one of the first qualified intermediary businesses in the Rocky Mountain region.</p>

<p>“Accruit and American Equity Exchange have worked side by side to advocate for the preservation of 1031 property exchanges for the past two decades, and I know that Brent and his team are as committed to quality and customer service as we are,” said Hansen. “Accruit also has the distinction of being the technology leader in the <a href="/services/1031-exchange">like-kind exchange</a> industry with their unique Exchange Manager application that streamlines the exchange process and provides increased security for our clients. We couldn’t have joined a better team.”</p>

<p><strong>About Accruit</strong></p>

<p>Accruit, LLC is a FinTech company that manages more than $8 billion in money flow annually. Accruit specializes in 1031 like-kind exchange services and escrow, including Digital Vault, an escrow solution for digital assets, and PaySAFE®, providing protection to buyers and sellers in online transactions. Learn more at https://www.accruit.com and https://paysafeescrow.com/.</p&gt;

<p><strong>About American Equity Exchange</strong></p>

<p>American Equity Exchange, Inc. is a nationwide Section 1031 real estate exchange accommodator and qualified intermediary. Since 1991, American Equity Exchange has assisted taxpayers in completing successful tax deferred exchanges nationwide with simultaneous property swaps, delayed exchanges, built-to-suit exchanges and both safe harbor and non-safe harbor parking arrangements.</p>