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Reminder: Deadlines for Like Kind Exchanges Started After October 17, 2013

01.10.2014

In a 1031 like kind exchange, the taxpayer must acquire all replacement property by the earlier of (a) the date that is 180 days from the date the relinquished property closes, or (b) the date the taxpayer’s federal income tax return is due, including extensions.  To get the full 180-day exchange period where the sale of the relinquished property closes late in 2013, the taxpayer may need to file for an extension of its tax filing deadline (assuming an April 15, 2014 tax filing deadline).

For example, a taxpayer who is an individual and who closes the sale of her relinquished property on December 1, 2013, will only have until April 15, 2014 to acquire all replacement properties, absent filing for an extension.  If she gets an extension, however, she will have until May 30, 2014 to acquire all replacement properties.  Because the timing for properly completing a like kind exchange are so critical, taxpayers must be mindful of the deadlines and plan accordingly.  If you have any questions, please call one of the attorneys in our Real Estate, Environmental and Natural Resources Law Practice Group.

by Max J. Burbach

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