Skip to main content

1031 LKE Extension

Dear Members and Friends,

In light of the challenges our nation and industry face as we continue to feel the impact of the novel coronavirus (“COVID-19”), the IPA along with a coalition of twenty-one real estate associations today submitted a comment letter urging the U.S. Treasury Department (“the Treasury”) and the Internal Revenue Service (“IRS”) to take administrative action to delay deadlines applicable to 1031 like-kind exchanges in order to ensure liquidity in the market.

The letter urges the Treasury and IRS to extend the deadline to identify replacement property and/or complete 1031 like-kind exchanges to the later of 120 days or to the last day of the general disaster extension period. Taxpayers, many of whom are small and medium-sized businesses and middle-class investors, should not have to be concerned about the possibility of having to pay significant capital gains taxes because 1031 like-kind exchange transactions cannot be completed due to the disruption caused by the COVID-19 pandemic.

Non-Profit Support & Relief

The IPA today also submitted a letter supporting an effort by the American Society of Association Executives (ASAE) urging Congressional leaders to include significant, emergency financial support to the association and nonprofit communities. ASAE specifically requests $25 billion in capital assistance for the non-profit sector and proposes a risk insurance program to mandate that businesses who demonstrate significant business interruption and sharp decline in present and future revenue would be insured in case of a possible pandemic or epidemic.

  Legislative Outlook

Additional legislative and policy changes in response to the COVID-19 outbreak include:

  • The White House has declared a national emergency, invoking the Stafford Act and triggering a structure for the Federal Emergency Management Agency (FEMA) to provide physical and financial assistance to state and local governments.
  • FINRA has issued a notice to broker-dealers that provides limited regulatory relief and guidance on implementing business continuity plans. The guidance highlights areas of particular concern, including remote office arrangements and teleworking, technological infrastructure and cybersecurity, and communications with customers and FINRA.
  • Congress first approved an $8.3 billion package to expand response capacities among the federal agencies and broaden access to health care, particularly senior citizens. The legislation includes new lending authority for the Small Business Administration to offer low-interest loans to small businesses affected by COVID-19 in at least 17 states and the District of Columbia.
  • The federally mandated paid sick leave requirements apply to Government entities and private sector companies with fewer than 500 employees, which must now provide up to 12 weeks of partially paid leave under the Family and Medical Leave Act (FMLA). Employers must also provide full-time and part-time workers two weeks of paid leave.
  • The Treasury Department and the IRS have postponed the filing deadline for 2019 taxes to July 15. Last week, they issued guidance allowing all individual and non-corporate tax filers to defer tax payments of up to $1 million due on April 15 to July 15 without penalties or interest; corporate taxpayers get a similar deferment of up to $10 million.
  • The Federal Reserve is encouraging banks to use the discount window, and has created a Commercial Paper Funding Facility (CPFF), a Primary Dealer Credit Facility (PDCF), and a Money Market Mutual Fund Liquidity Facility (MMLF) to support credit extensions to households and businesses. On Friday the Fed announced that it was expanding the MMLF to include state and municipal money markets.
  • The Federal Financial Housing Agency has directed Fannie Mae and Freddie Mac to suspend evictions and foreclosures for at least 60 days, and to offer mortgage borrowers forbearance for up to 12 months. Separately, Secretary of Housing and Urban Development Ben Carson directed the Federal Housing Administration (FHA) to stop foreclosures and evictions for 60 days, starting on March 18.
  • The Senate and House are now working on another broad stimulus package that would provide direct payments to families and individuals, create new loan programs for small and medium-sized businesses, and delay many tax payments, including estimated corporate taxes and employer payroll taxes.

Regulator COVID-19 Resources

Please remember to visit the SECFINRA, and NASAA COVID-19 response pages for additional guidance on temporary relief, extensions and information.


The IPA wants to support the U.S. government in minimizing the economic harm from COVID-19. We are actively seeking ideas from our members for what we can do and what we can suggest to the Administration, Congress and our regulators for programs to stimulate economic growth and support hard hit industries. If you have any suggestions, please contact myself or Tony.

Anya Coverman
SVP, Government Affairs and General Counsel
Institute for Portfolio Alternatives