IRC §1031 and RMD rollover extension relief - Spidell

IRC §1031 and RMD rollover extension relief


In addition to the payment and filing extension relief we mentioned in a Flash E-mail last week, IRS Notice 2020-23 provides extension relief for IRC §1031 like-kind exchanges and extends the 60-day period for some taxpayers to make a rollover distribution from an eligible retirement plan, including IRAs.

The extension relief provided in IRS Notice 2020-23 includes time-sensitive actions that are covered by Rev. Proc. 2018-58, which includes the following.

IRC §1031 exchanges

For taxpayers with a like-kind exchange currently in progress:

  • If the 45-day identification period expires on or after April 1, 2020, and before July 15, 2020, the taxpayer has until July 15, 2020, to complete the identification; and
  • If the 180-day exchange period expires on or after April 1, 2020, and before July 15, 2020, the taxpayer has until July 15 2020, to complete the exchange (assuming the due date of the return, including extensions, is not before July 15, 2020).

Note: California conforms to these extensions as well.

RMD rollovers

This relief also extends the period to complete a rollover distribution from an eligible retirement plan until July 15, 2020, if the 60-day deadline to complete the rollover falls on or after April 1, 2020, and before July 15, 2020.

This could provide welcome relief to taxpayers who took an RMD in February, before the CARES Act suspended the RMD requirement for 2020. These taxpayers now have until July 15, 2020, to recontribute their withdrawals and treat them as a rollover.

IRS Notice 2020-23 is available at:

www.irs.gov/pub/irs-drop/n-20-23.pdf

Rev. Proc. 2018-58 is available at:

www.irs.gov/pub/irs-drop/rp-18-58.pdf

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