When Disaster Strikes Mid-Exchange: How Federal Disaster Declarations Extend Your 1031 Deadlines

As wildfires tear through Spokane, the Lake Chelan corridor, and other parts of eastern Washington this summer, some property owners in those areas are in the middle of a 1031 exchange — watching the calendar tick toward a 45-day identification deadline or a 180-day exchange deadline while evacuation orders close roads, lenders halt funding, and title companies suspend operations.

This article explains the federal mechanism that can extend those deadlines when a disaster intervenes — and what you and your qualified intermediary need to do to preserve the exchange.

The Problem: Statutory Deadlines That Do Not Bend

The two deadlines that govern every 1031 exchange are written into the Internal Revenue Code itself:

45 days from the closing of the relinquished property to identify replacement property (§1031(a)(3)(A)).
180 days from that same closing — or the due date of the taxpayer's return for the year of transfer, whichever comes first — to close on the replacement property (§1031(a)(3)(B)).

These deadlines are statutory. They are not regulations, not IRS guidelines, not rules of thumb. They are set by Congress, and neither the IRS nor your qualified intermediary has general authority to extend them. Miss day 45, and you cannot identify. Miss day 180, and the exchange fails. There is no "reasonable cause" exception, no late-filing relief, no discretionary waiver.

That rigidity is what makes a disaster so dangerous for an exchanger mid-transaction. A wildfire that closes a county recorder's office, a flood that disables a lender, an earthquake that destroys the replacement property you identified three weeks ago — none of these events, standing alone, pauses the statutory clock.

Unless a federal disaster declaration triggers the one mechanism Congress built for exactly this situation.

The Solution: IRC §7508A and Revenue Procedure 2018-58

Section 7508A of the Internal Revenue Code authorizes the Secretary of the Treasury to postpone certain time-sensitive acts — including the 45-day and 180-day deadlines — for taxpayers affected by a Presidentially declared disaster or a disaster declared by the IRS under its own authority.

The implementing guidance is Revenue Procedure 2018-58, which spells out who qualifies for relief, how the postponed deadlines are calculated, and what the taxpayer must do to claim the extension.

The critical point: disaster relief is not automatic. A FEMA declaration alone does not extend your exchange deadlines. The IRS must issue a specific Disaster Relief Notice (or News Release) that references the disaster and specifies a postponement period. Until that notice is published, the original deadlines remain in force — regardless of how severe the disaster is or how directly it has affected your transaction.

Who Qualifies

Revenue Procedure 2018-58 offers two paths to relief, each with its own eligibility requirements.

Path 1: Section 6 — General Postponement ("Affected Taxpayers")

Section 6 applies to "affected taxpayers" as defined in the specific IRS Disaster Relief Notice. This typically includes:

Individuals whose principal residence is in the covered disaster area.
Businesses whose principal place of business is in the covered area.
Any taxpayer whose records necessary to meet a deadline are located in the covered area.

If you are an affected taxpayer and your 45-day or 180-day deadline falls on or after the disaster date specified in the notice, that deadline is automatically extended to the last day of the postponement period stated in the notice.

Example. A wildfire disaster is declared with a disaster date of July 28, 2026, and the IRS sets a postponement period ending January 15, 2027. You closed on your relinquished property on July 1, and your 45-day identification deadline would normally be August 14. Because you are an affected taxpayer and August 14 falls after the disaster date, your identification deadline is postponed to January 15, 2027.

Path 2: Section 17 — The 120-Day Alternative Extension

Section 17 is broader. It applies not only to affected taxpayers but also to any taxpayer who faces difficulty meeting a 1031 deadline because of the disaster — even if the taxpayer's own residence or office is outside the disaster zone.

Qualifying "difficulties" include:

The relinquished property or replacement property is located in the covered disaster area.
The principal place of business of a party to the transaction — the qualified intermediary, the lender, the title company, a settlement attorney — is in the disaster area.
An employee or agent of the taxpayer or a transaction party is killed, injured, or missing as a result of the disaster.
Documents, records, or land records needed to complete the exchange are destroyed, damaged, or inaccessible.
A lender is unable to fund a loan because of the disaster.
Title insurance is unavailable because of the disaster.

Under Section 17, deadlines are postponed for 120 days or until the last day of the general disaster postponement period, whichever is later.

But there are guardrails:

The exchange must have already begun — the relinquished property must have been transferred on or before the disaster date. Section 17 does not help you start a new exchange after the disaster and claim extended deadlines.
The postponed deadline cannot exceed one year from the original deadline.
The postponed deadline cannot exceed the due date (including extensions) of the taxpayer's federal income-tax return for the year the relinquished property was transferred.

The Substantially-Damaged-Property Exception

There is one additional rule that matters most when fire, flood, or earthquake destroys the property you already identified.

Ordinarily, if your 45-day identification period has already expired before the disaster date, it cannot be reopened. You made your identifications; the window closed.

But Section 17.03 of Revenue Procedure 2018-58 creates an exception: if an identified replacement property is "substantially damaged" by the disaster, the 45-day identification period may be extended — even though it had already expired before the disaster struck. The same rule applies in reverse exchanges where the identified relinquished property is substantially damaged.

This exception exists because the disaster has effectively destroyed the exchange the taxpayer structured. Without the ability to re-identify, the taxpayer would be forced into a failed exchange through no fault of their own — precisely the inequity that §7508A was designed to prevent.

What You Must Do: Notify Your QI in Writing

This is where exchangers and their advisors most often stumble.

Your qualified intermediary does not automatically apply disaster extensions. The QI cannot determine whether you meet the eligibility criteria — that is a tax question between you and your CPA or tax attorney. And the QI will not unilaterally change your deadlines without instruction.

If you believe you are eligible for disaster relief, you must:

Consult your tax advisor to determine which section of Revenue Procedure 2018-58 applies to your situation and to calculate your new deadlines.
Notify your QI in writing — promptly — that you are eligible for the extension and that you are electing to use it. State the specific new deadlines.
Understand the consequence for your exchange funds. If you extend your deadlines, your QI will hold the exchange proceeds until the new, postponed deadlines pass. You will not have access to those funds during the extension period.

If you do not notify the QI, the original 45-day and 180-day deadlines remain in effect. If those deadlines pass without identification or closing, the exchange fails — even if you would have qualified for relief.

FEMA Declarations vs. IRS Disaster Relief Notices: They Are Not the Same Thing

This distinction trips up even experienced practitioners.

FEMA issues several types of declarations, including Emergency Declarations, Major Disaster Declarations, and Fire Management Assistance Grants (FMAGs). Each authorizes different categories of federal aid — temporary housing, debris removal, firefighting cost reimbursement, individual assistance, public infrastructure grants.

But none of them, standing alone, extends your 1031 deadlines.

The IRS must separately issue its own Disaster Relief Notice — typically published as a News Release or Notice on irs.gov — that references the disaster and specifies the postponement period. The IRS notice usually follows a Presidential major-disaster declaration, but the timing, scope, and covered counties can differ from the FEMA declaration. And some FEMA actions — particularly FMAGs, which fund firefighting costs but not individual assistance — may never result in an IRS disaster-relief notice at all.

The practical lesson: do not assume that a FEMA declaration or a governor's state-of-emergency proclamation has extended your exchange deadlines. Check the IRS "Tax Relief in Disaster Situations" page (irs.gov/newsroom/tax-relief-in-disaster-situations) for the specific notice covering your area and disaster.

A Worked Example: Wildfire Hits During the Identification Period

Consider a Washington investor who closes on the sale of a rental property on July 10, 2026. The exchange proceeds go to the qualified intermediary. The 45-day identification deadline is August 23, 2026. The 180-day exchange deadline is January 5, 2027.

On July 28, a wildfire sweeps through the county where the investor lives and where the replacement properties she has been evaluating are located. Roads are closed. Inspections cannot be scheduled. The county assessor's office is shuttered.

If the IRS issues a Disaster Relief Notice with a disaster date of July 28 and a postponement period ending February 15, 2027:

Under Section 6 (if the investor is an "affected taxpayer"): The 45-day deadline of August 23 falls after the disaster date, so it is postponed to February 15, 2027. The 180-day deadline of January 5 also falls after the disaster date, so it too is postponed to February 15.
Under Section 17 (if the investor qualifies on the basis of difficulty): The 45-day deadline is postponed by 120 days (from August 23 to December 21, 2026) or to the last day of the postponement period (February 15, 2027), whichever is later — so the new identification deadline is February 15. The 180-day deadline is similarly extended.

Either way, the investor gains months of additional time to identify and close on replacement property — time that may be the difference between completing the like-kind exchange and losing the deferral.

What About the Current Washington Fires?

As of early August 2026, wildfires have caused severe damage in the Spokane area and parts of the Lake Chelan corridor. The governor has declared a statewide emergency. FEMA has authorized a Fire Management Assistance Grant for the Upriver Fire in Spokane County.

Separately, Washington is still within the relief window from a December 2025 major disaster declaration (FEMA-4906-DR) covering severe storms, flooding, landslides, and mudslides in multiple counties — including Chelan County — with IRS tax-relief deadlines postponed through August 2026.

Whether the current wildfire events will result in a separate Presidential major-disaster declaration — and a corresponding IRS Disaster Relief Notice that would extend 1031 deadlines — remains to be seen. The process takes time: damage assessments, a governor's request to the President, a FEMA recommendation, and then the IRS's own notice.

If you are in the middle of a 1031 exchange and your property, your replacement-property search area, or your transaction parties are in the affected region, do not wait for the declaration to act. Contact your tax advisor now. Document the specific difficulties the disaster is causing for your exchange. And notify your qualified intermediary that a disaster extension may apply — so that the QI can hold your funds and preserve your position while the federal process unfolds.

The Puget Sound Angle

Eastern Washington exchangers are the most directly affected by the current fires, but the disaster-extension mechanism is relevant to every 1031 exchange in the state — and across the country.

Washington has seen multiple federally declared disasters in recent years: the December 2025 storms that triggered FEMA-4906-DR; flooding events in prior years; and now the 2026 wildfire season. Puget Sound property owners — from Tacoma and Pierce County to Gig Harbor and South King County — are not immune. Atmospheric rivers, flooding, and landslides have affected western Washington counties that are well within the FEMA-4906-DR disaster footprint.

As a qualified intermediary based in Tacoma, we monitor IRS disaster-relief notices for every active exchange in our portfolio. When a notice is issued that could affect one of our exchangers, we reach out proactively — but the legal determination of eligibility and the election to use the extension must come from the taxpayer and their advisor, not from us.

If you have questions about whether a current or future disaster declaration affects your exchange, contact your CPA or tax attorney — and make sure your qualified intermediary is in the loop.

Key Takeaways

The 45-day and 180-day deadlines are statutory. No one can extend them except through the §7508A disaster-relief mechanism.
Disaster relief requires an IRS notice, not just a FEMA declaration or a governor's emergency order.
Two paths to relief exist under Revenue Procedure 2018-58: Section 6 (affected taxpayers, general postponement) and Section 17 (broader eligibility, 120-day or end-of-postponement-period extension).
You must notify your QI in writing. Extensions are not automatic.
Substantially damaged replacement property can reopen the 45-day identification window — the one exception to the rule that expired deadlines cannot be extended.
Act before the declaration. Document your difficulties and notify your QI and tax advisor as soon as the disaster affects your transaction.

Olympic Exchange Accommodators, LLC is an attorney-led qualified intermediary based in Tacoma, Washington, facilitating tax-deferred 1031 exchanges throughout the Puget Sound region and across Washington State. If a disaster has affected your exchange timeline, contact your tax advisor and your QI promptly to evaluate whether deadline relief is available.

Disclaimer: This article is for general educational purposes and is not legal or tax advice. Disaster-relief eligibility depends on the specific IRS notice, the facts of your exchange, and your individual tax situation. Please consult your own CPA or tax attorney before relying on any deadline extension.

When Disaster Strikes Mid-Exchange: How Federal Disaster Declarations Extend Your 1031 Deadlines