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Like Kind Exchange - Identification Period

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Extortion

Guest
What is the name of your state? CA
In an earlier post I found the following:
Like-kind exchanges. If you trade business or investment property for other business or investment property of a like kind, you do not pay tax on any gain or deduct any loss until you sell or dispose of the property you receive. To be nontaxable, a trade must meet all six of the following conditions.

1) The property must be business or investment property. You must hold both the property you trade and the property you receive for productive use in your trade or business or for investment. Neither property may be property used for personal purposes, such as your home or family car.

2) The property must not be held primarily for sale.

4) There must be a trade of like property. The trade of real estate for real estate is a trade of like property.

5) The property to be received must be identified within 45 days after the date you transfer the property given up in the trade.

6) The property to be received must be received by the earlier of:
a) The 180th day after the date on which you transfer the property given up in the trade, or
b) The due date, including extensions, for your tax return for the year in which the transfer of the property given up occurs.

My question involves item #5 Property to be received must be identified within 45 days..... Can you expand on this?

Must one notify IRS they have selected a "like" property which they intend to purchase within the 180 day period after the sale of the "like" property??

How does one comply with this requirement??

We are selling a rental property and considering purchasing another property to put into rental with the proceeds of the sale.

Thanks for your help.
JJ
 



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