updated October 2020
Be sure to read Tax Straddling – Pay Taxes in 2021 or 2022?
If your transaction closed at the end of 2018 and you are unable to find new property to identify or purchase the property that you have identified, you may still be able to defer paying taxes on your capital gains until 2020. Since you will receive your 1031 funds back in 2019, in certain circumstances, since you did not have control/possession of your funds until 2019, the IRS may allow you to pay taxes on your 2019 tax return, which are due in 2020. This is in accordance with IRC Section 453(d) and requires your accountant to file specific tax forms. Ask your accountant if you are eligible to take advantage of this “mini” tax deferral.
READ MORE: Tax Straddling – which year to pay taxes?