Safe harbor deed language issued for SECURE 2.0 Act

Updated 7.17.23: In Notice 2023-54 the IRS and the U.S. Treasury intend to issue final regulations related to RMDs under Section 401(a)(9) of the Tax Code that will apply no earlier than the 2024 distribution calendar year. The notice also provides guidance related to certain provisions of Section 401(a)(9) that apply for 2021, 2022 and 2023. It provides rollover relief (including an extension of the 60-day rollover period to Sept. 29, 2023) when it comes to any distribution made from a plan or IRA in the first half of 2023 that would have been an RMD if not for Section 107 of the SECURE 2.0 Act, and allows certain rollovers to IRAs.

The U.S. Treasury Department and the IRS recently issued Notice 2023-30 providing safe harbor deed language for extinguishment and boundary line adjustment clauses as required by the SECURE 2.0 Act of 2022. Notice 2023-30 will be published in the Internal Revenue Bulletin on April 24.

Section 605(d)(2) of the SECURE 2.0 Act provides donors the opportunity to amend certain conservation easement deeds to substitute the safe harbor language for the corresponding language in the original deed. Taxpayers will have until July 24, 2023, to record their safe harbor deed amendments.

This safe harbor notice addresses only corrections to extinguishment and/or boundary line adjustment clauses in accordance with the SECURE 2.0 Act. This safe harbor notice does not address any other deed amendments. Donors are not required to amend their deeds to include the safe harbor language in the notice.

Section 605(d)(2) of the SECURE 2.0 Act applies only if the amendment is effective as of the date of the recording of the original easement deed. Notice 2023-30 provides that if a donor substitutes the safe harbor deed language for the corresponding language in the original eligible easement deed, and the amended deed is signed by the donor and donee and recorded on or before July 24, 2023, the amended eligible easement deed will be treated as effective for purposes of Section 170, Section 605(d)(2) of the SECURE 2.0 Act and Notice 2023-30 as of the date the eligible easement deed was originally recorded, regardless of whether the amended eligible easement deed is effective retroactively under relevant state law.

Editor’s note: This article was originally published April 18, 2023, and updated with new content on July 17, 2023.