Structuring Like-Kind Real Estate Exchange Treatment

The Code requires that a seller seeking like-kind exchange treatment acquire the exchange property within the period beginning on the day on which he transferred title to the relinquished property and ending on the earlier of the 180th day thereafter or the due date (determined with regard to extensions) for his federal income tax return. Consequently, a calendar year seller who does not file a timely request for an automatic six-month extension for the year in which he sells relinquished property will have fewer than 180 days within which to acquire an exchange property if the sale of the relinquished property occurs after October 17 (October 18 if the following year is a leap year).  On the other hand, a calendar year taxpayer who files a timely request for an automatic six-month extension for the year in which he sells relinquished property will, in all cases, have 180 days within which to acquire an exchange property.