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What happens If the reinvestment of the proceeds is delayed because I have to wait for government actions?

Will the delay cause a failure of the 12-month requirement?


Answers
  • Marko Belej
    March 31, 2021

    The only exception to the 12-month reinvestment of sales proceeds rule is a delay caused by a federally declared disaster. There is no exception for a delay caused by government actions.

  • Matthew Rappaport
    April 02, 2021

    Unlike with the Working Capital Safe Harbor, the 12-month reinvestment does not have extensions for governmental action or inaction affecting the transaction. The best you can hope for on that is relief in the form of an IRS Notice, like there was with coronavirus.

  • Maria De Los Angeles Rivera
    April 12, 2021

    The regulations provide a safety net for those cases, but really it does not explain how and for how long. It is interpreted that it may extend for as long as the government action takes place.

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