IRC section 1031 allows taxpayers to defer gains from the sale of real property by exchanging it for property of “like-kind.” Like-kind exchanges are complex and can take different forms, so each transaction is unique.

The most common type of exchange is a delayed exchange where the taxpayer sells their property before acquiring replacement property. In a deferred exchange, there are two important timing rules that are generally fixed: 1) the taxpayer has up to 45 days to obtain written identification of the replacement property after the sale of the relinquished property; and 2) the seller is required to close on the replacement property the earlier of 180 days from the time the initial sale of the relinquished property occurred or the due date of the tax return (including extensions) for the taxable year in which the relinquished property was sold.


Due to the California winter storms, the IRS issued Revenue Procedure 2018-58, extending both the 45-day identification and the 180-day exchange closing periods. In March 2023, California conformed to the same federal IRC section 1031 exchange extension deadlines.

Two key sections of Revenue Procedure 2018-58 that grant the taxpayer extension relief to the IRC 1031 exchange period deadlines are Section 6 and Section 17. Section 6 applies only to affected taxpayers (as identified in the IRS Disaster Relief Notice). Any 45-day or 180-day deadline that occurs on or after Jan. 8, 2023, the disaster date, is extended to Oct. 16, 2023, regardless of whether the exchange occurred before or after the disaster date.

Section 17 applies to affected taxpayers and non-affected taxpayers having difficulty meeting the exchange deadline due to the disaster. However, the relinquished property must have been transferred on or before the disaster date. If the 45-day or 180-day deadline falls on or after Jan. 8, 2023, it is postponed by 120 days or Oct. 16, 2023, whichever is later.

The extension will provide taxpayers additional time to identify the replacement properties. Additionally, the extension will provide taxpayers more time to conduct additional due diligence to purchase replacement property. Please refer to the most recent IRS updates to determine which California counties qualify for these deadline extensions.

Please reach out to GHJ’s Real Estate Tax team or GHJ’s Tax Services department with any questions about the 1031 like-kind exchange deadlines or requirements.

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Sarah Nieto

Sarah Nieto has two years of public accounting experience providing tax compliance services to clients. Prior to joining GHJ in 2023, Sarah worked for a Texas-based CPA firm serving clients in the Dallas-Fort Worth area. She also spent five years working in the insurance industry, where her work…Learn More