Annealing Mg-implanted homoepitaxial GaN at temperatures above 1400 °C eliminates the formation of inversion domains and leads to improved dopant activation efficiency. Extended defects, in the form of inversion domains, contain electrically inactive Mg after post-implantation annealing at temperatures as high as 1300 °C (one GPa N2 overpressure), which results in a low dopant activation efficiency. Triple-axis x-ray data reveal that implant-induced strain is fully relieved after annealing at 1300 °C for 10 min, indicating that strain-inducing point defects formed during implantation have reconfigured and inversion domains are formed. However, annealing at temperatures of 1400–1500 °C (one GPa N2 overpressure) eliminates the presence of the inversion domains. While residual defects, such as dislocation loops, still exist after annealing at and above 1400 °C, chemical analysis at multiple dislocation loops shows no sign of Mg segregation. Meanwhile, an overall decreasing trend in the dislocation loop density is observed after annealing at the higher temperatures and longer times. Additionally, once inversion domains are formed and the samples are cooled to room temperature, they are shown to dissolve with subsequent annealing above 1400 °C. While such defects have been observed before, the important finding that such defects can be dissolved with a short, higher temperature step is key. Earlier work [Breckenridge et al., J. Appl. Phys. Lett. 118, 022101 (2021)] addressing electrical measurements of these types of samples showed that annealing at 1400 °C leads to a dopant activation efficiency that is an order of magnitude higher than that observed at 1300 °C. This work complements earlier work by identifying the inversion domains, which incorporate Mg, and points to the benefits, in terms of defect density and p-type dopant activation, of using higher temperature (>1400 °C) annealing cycles to activate Mg in GaN, even if the Mg-containing inversion domains had been formed during lower temperature annealing.