Disaster Relief for Investment Property Owners in Los Angeles County

January 28, 2025

Disaster Relief for Investment Property Owners in Los Angeles County

The recent wildfires that began on January 7, 2025, have brought immense challenges to individuals and businesses in Los Angeles County. For investment property owners engaged in 1031 like-kind exchanges, understanding the relief measures available is critical to navigating these difficult times while protecting your tax-deferred benefits. Fortunately, the IRS has announced provisions that extend key deadlines for those impacted by this disaster.

IRS Relief Measures: Extensions for 1031 Deadlines

As outlined in Revenue Procedure 2018-58, taxpayers affected by federally declared disasters may qualify for extensions to their 1031 exchange deadlines. These extensions include:

  • The 45-Day Identification Period: Normally, taxpayers must identify replacement properties within 45 days. Disaster relief provides additional time to make these identifications.
  • The 180-Day Exchange Completion Period: This period, typically required for the full completion of an exchange, can also be extended under these provisions.

The IRS has officially confirmed that those impacted by the Los Angeles County wildfires are eligible for these extensions. The affected areas and guidelines are listed in the IRS News Release. All qualifying taxpayers have until October 15, 2025, to file returns, identify replacement properties, or complete exchanges, depending on their situation.

How to Determine Eligibility

Eligibility for disaster relief requires your property or exchange activity to be directly impacted by the wildfire. You qualify if:

  • Your property or primary exchange activity is located within the declared disaster area.
  • You experienced displacement or delays due to the wildfires.

For detailed eligibility guidelines, consult with a tax advisor or refer to the IRS disaster relief notice.

The Role of Qualified Intermediaries

Navigating the complexities of disaster relief requires expertise. A Qualified Intermediary (QI) plays a crucial role in ensuring compliance with extended deadlines and IRS regulations. At Hub1031, we provide the following support:

  • Confirming your eligibility for IRS relief measures.
  • Guiding you through adjusted timelines for identification and exchange completion.
  • Ensuring proper documentation to safeguard your compliance during audits.

Our team works closely with you to adapt your 1031 exchanges to these unique circumstances while maintaining tax-deferral benefits.

Why This Relief Matters

Investors relying on 1031 exchanges face strict deadlines that disasters can disrupt. By leveraging IRS relief measures, you can:

  • Maintain compliance with Section 1031 while addressing unforeseen challenges.
  • Protect the integrity of your investments.
  • Preserve long-term financial goals despite disaster-related disruptions.

These relief provisions highlight the IRS’s commitment to supporting taxpayers during challenging times.

Expert Guidance You Can Rely On

At Hub1031, we specialize in helping property owners manage 1031 exchanges, even in the face of disasters. From understanding your eligibility to ensuring compliance with extended timelines, we’re here to safeguard your investments.

Contact us today to learn how we can help you navigate the complexities of disaster relief for 1031 exchanges.

FAQ

What are the IRS relief measures for 1031 exchanges?

The IRS provides extensions for the 45-day identification period and the 180-day exchange completion period for taxpayers affected by federally declared disasters.

Who qualifies for disaster relief measures?

Taxpayers whose property or primary exchange activity is located within the federally declared disaster area or those who experienced delays or displacement due to the disaster.

How long is the deadline extended?

For those affected by the Los Angeles County wildfires, the deadline for filing returns, identifying replacement properties, or completing exchanges is extended until October 15, 2025.

What is the role of a Qualified Intermediary (QI)?

A QI ensures compliance with IRS regulations, guides you through adjusted timelines, and helps with documentation to safeguard your tax-deferred benefits.

How can Hub1031 assist with disaster relief?

Hub1031 offers expert guidance to confirm your eligibility, adjust your 1031 exchange timelines, and ensure compliance with IRS relief measures during audits.