Question

How long after the initial exchange does a taxpayer have to identify replacement property in a like-kind exchange?

a. The like-kind property to be received must be identified within 45 days.
b. The like-kind property to be received must be identified within 180 days.
c. The like-kind property to be received must be identified by the earlier of 45 days or the last day of the taxpayer's taxable year.
d. There is no deadline for the identification of replacement property.
e. All of the choices are correct.

Answer 1

The like-kind property in a 1031 exchange must be identified within 45 days. The acquisition must be completed within 180 days or by the tax return due date for that year.

Step-by-step explanation:

The correct answer to how long a taxpayer has to identify replacement property in a like-kind exchange is: a. The like-kind property to be received must be identified within 45 days. In a like-kind exchange under Section 1031 of the Internal Revenue Code, the taxpayer must formally identify the replacement property within 45 days from the date of the sale of the relinquished property. Furthermore, the acquisition of the like-kind replacement property must be completed within 180 days of the sale of the relinquished property or by the due date of the taxpayer's tax return for the year in which the transfer of the relinquished property occurred, whichever is earlier.