Does an IRS disaster extension apply if only my replacement property is in the disaster area?

The 1031 relief reaches people outside the disaster area

Ordinary disaster relief covers "affected taxpayers" as defined in Reg. section 301.7508A-1(d)(1): mainly people who live, or businesses whose principal place of business is, in the covered area, plus those whose necessary records are kept there. Someone living in another state does not fit those categories just because the property they are buying does.

Section 17.02(2)(b) of Rev. Proc. 2018-58 adds a second route for exchangers. A transferor qualifies if they are an affected taxpayer, or if they have "difficulty meeting the 45-day identification period or 180-day exchange period deadline" due to the disaster for listed "or similar reasons." The first listed reason is that "the relinquished property or the replacement property is located in a covered disaster area."

The IRS still uses this procedure. Its 2026 releases, including the relief for the earthquake in Hawaii County, postpone the time-sensitive acts listed in Reg. section 301.7508A-1(c)(1) and in Rev. Proc. 2018-58.

The sale date and the deadline date both have to fall the right way

Relief applies only if the relinquished property "was transferred on or before the date of the federally declared disaster" (section 17.02(2)(a)). If you sold after the disaster began, you knew where the replacement was and section 17 does not help.

Next, only deadlines that "fall on or after the date of a federally declared disaster" move (section 17.02(1)). A day 45 that passed before the disaster stays passed, with one exception in section 17.03: it is postponed if an identified replacement property is substantially damaged by the disaster.

The postponement is 120 days or to the last day of the general relief period in the IRS announcement, whichever is later. It may never run past the due date, including extensions, of your return for the year of the transfer, or past one year.

• Other listed reasons include an intermediary, lender, title insurer or settlement attorney whose principal place of business is in the area.
• A lender that will not fund, or a title insurer that cannot issue a policy, because of the disaster also qualifies.
• Lost or destroyed exchange documents or land records qualify as well.

Worked example: a replacement in a declared county moves day 180 to late December

Hypothetical dates; confirm yours with your intermediary and CPA. You sell a rental in Ohio on Monday March 2, 2026, identify a warehouse in a coastal county by April 16, and day 180 falls on Saturday August 29, 2026. A hurricane strikes the warehouse's county on July 10, and the IRS announces relief for that county.

Your sale preceded the disaster, day 180 falls after it, and the replacement sits in the covered area, so day 180 moves 120 days to Sunday December 27, 2026, unless the IRS relief date is later. Your 2026 return is due April 15, 2027, so the cap does not bite.

Day 45 passed in April and does not move unless the warehouse is substantially damaged. You cannot add new properties to the list. If the warehouse is destroyed, the guidance on an identified property that falls through after day 45 applies.

Document the difficulty, and keep filing and paying on time

Section 17.02(2)(b)(ii) is framed around difficulty "due to the federally declared disaster." Keep the IRS news release naming the county, and a written record of how the disaster affected the closing, such as lender, title or inspection delays, alongside your exchange file.

Section 17.04 says a transferor who qualifies only through the difficulty route is "not considered an affected taxpayer" for any other act. Your return and tax payments stay on their normal dates unless you qualify separately.

For the general rule that hardship otherwise cannot extend the deadlines, see can I get an extension on my 45-day or 180-day deadline, and for the interaction with the return due date, do I need a tax extension to keep my full 180 days.

A trust interest can keep the exchange alive if the damaged property cannot close

The extra 120 days only helps if something on your list can still close. If a Delaware Statutory Trust interest was named by day 45, it can take the funds even while the damaged property is in dispute; see how quickly a DST can close.

If nothing else was identified, the postponement buys time to repair or renegotiate the original property, not to choose a new one. Confirm the relief and its end date with your intermediary in writing.