Posts tagged Realtor
Home Prices Have Hit a New High - Is the Housing Market About to Crash?

By Clare Trepasso

With home prices at a new record high and homes flying off the market in hours in some cases, it’s no wonder that Google searches for “when is the housing market going to crash” have spiked dramatically in recent weeks. After all, the mania seems reminiscent of the run-up to the housing bubble in the mid-2000s—and we’ve all been told that what goes up must eventually come down.

However, housing is likely to keep defying common sense. Experts say there’s no reason to prepare for a crash landing like we experienced in 2008 and 2009. This time around, the reason for the out-of-control prices is simply that there are many more buyers than there are properties for sale. Another simple rule: Prices rise when there is more demand than supply. Crazy, it seems, is the new normal.

1031 Extensions Granted: COVID-19 Important Information Regarding IRS Extended Deadlines

On April 7, the IRS issued Notice 2020-23, extending a variety of deadlines, including 1031 deadlines. Although the Notice is confusing, because it is not written like the typical Disaster Relief Notices, this Notice extends any 45-day or 180-day deadline that occurs between April 1 and July 14, to July 15, 2020.

1031 Fund Security

A major role of a Qualified Intermediary is to safeguard taxpayer funds during a 1031 Exchange. Since Qualified Intermediaries are not regulated by the federal government or by most states, financial assurances, expertise, company strength and reputation are critical factors.

Real estate professionals are working to convince the IRS to change the start date from April 1st to January 20th so that the extensions apply to more taxpayers. Please note that this is different from the usual disaster extension that provides for an extra 120 days.

Here are two examples to illustrate the current extension.

Example 1: Exchange began April 1, 2020. 45th day is May 16, which would be extended to July 15, 2020. Taxpayer must still close on replacement property by Sept 28, which is the 180th day; because Sept 28 is after the last day of the disaster period (July 15).

Example 2: Exchange began Dec 31, 2019, 45th day is Feb 14, 2020. ID period is not extended because it is before April 1. The 180th day is June 28, which would be extended to July 15, 2020. As always, exchangers should speak with their tax advisors to determine if they are eligible for an extension.

This remains a fluid situation and should be confirmed with the IRS.