How IRS disaster relief can postpone 1031 exchange deadlines (Rev. Proc. 2018-58, Section 17)

Who may be affected, and who is outside its scope

A transferor (the person selling the relinquished property) qualifies for a Section 17 postponement only if both tests are met. First, the relinquished property was transferred on or before the date of the federally declared disaster (for a reverse exchange, qualified indicia of ownership were transferred to the exchange accommodation titleholder on or before that date). Second, the taxpayer either is an “affected taxpayer” as defined in the IRS news release for that disaster, or has difficulty meeting the deadline because of the disaster for one of the listed reasons or a similar one.

The listed difficulty reasons are broader than the location of the property: (A) the relinquished or replacement property is in the covered disaster area; (B) the principal place of business of any party to the transaction, including the qualified intermediary, exchange accommodation titleholder, transferee, settlement attorney, lender, financial institution, or title insurance company, is in the covered area; (C) a party or an involved employee is killed, injured, or missing; (D) an exchange document or land record is destroyed, damaged, or lost; (E) a lender will not fund because of the disaster or because hazard insurance is unavailable; (F) a title insurer cannot issue the required policy.

Outside the scope: a sale that closes after the disaster date; a disaster whose IRS release does not cover time-sensitive acts under Rev. Proc. 2018-58; and any other tax deadline. Section 17.04 says a taxpayer who qualifies only under the difficulty tests (not as an affected taxpayer) gets no other relief from the release.

What dates matter

A qualifying deadline that falls on or after the disaster date is postponed to the later of 120 days after the original deadline, or the last day of the general postponement period stated in the IRS release for that disaster.

Two hard caps apply regardless: the postponed date can never run past the due date (including extensions) of the taxpayer’s tax return for the year of the transfer, and never past one year.

Section 17.03 adds one backward-looking rule: a 45-day identification deadline that fell before the disaster is also postponed if an identified replacement property was substantially damaged by the disaster.

Example of the wording that triggers Section 17, from the 2026 Indiana release (IN-2026-01): affected taxpayers have until February 1, 2027 “to perform other time-sensitive actions described in Treas. Reg. § 301.7508A-1(c)(1) and Rev. Proc. 2018-58” that were due on or after August 11, 2026 and before February 1, 2027. A 1031 deadline in that window for a qualifying Indiana taxpayer would move to the later of 120 days or February 1, 2027, subject to the two caps.

What to discuss with your QI, CPA, and attorney

Ask your qualified intermediary to confirm, in writing, which IRS release you are relying on, which test you meet (affected taxpayer or a specific difficulty ground), and the recomputed deadline with both caps applied.

Ask your CPA whether your return due date for the year of sale caps the postponement and whether filing an extension changes the answer.

Keep evidence of the difficulty ground: the lender’s refusal, the title company’s notice, the location of the intermediary’s office, or the damage to the identified property.

If your sale had not yet closed on the disaster date, the postponement does not apply; plan the exchange around the original 45 and 180 days.

What remains uncertain

Each release can “specify otherwise” and limit which acts are postponed. The general pattern above is common but has to be checked release by release.

Whether a reason not listed in (A) through (F) is “similar” enough is a judgment call for your advisers.

State income-tax conformity to the federal postponement is not addressed by the revenue procedure.

The IRS sometimes expands a release to additional counties after the initial announcement; the covered area can change.

Which guides on this site this affects

The 1031 exchange timeline and the deadline calculator now describe relief as conditional rather than automatic, and link here.

The video pages for the 45-day rule and the 180-day rule carry the corrected wording in their written breakdowns.

The FAQ hub entries on extensions should point here.