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use in a trade or business or for investment if such property is
exchanged solely for property of like kind which is to be held
either for productive use in a trade or business or for
investment." For transfers after July 18, 1984, section
1031(a)(3), enacted as part of the Deficit Reduction Act of 1984,
Pub. L. 98-369, sec. 77(a), 98 Stat. 494, 595, governs deferred
like-kind exchanges.
Section 1031(a)(3)(A) requires deferred replacement property
to be identified within 45 days after the date the taxpayer
transfers the property relinquished in the exchange. The parties
agree that petitioners satisfy this requirement.
Section 1031(a)(3)(B) provides that the property received by
the taxpayer (the exchanged property) will not qualify for tax-free
treatment if the exchanged property is received after the earlier
of 180 days from the date the taxpayer transfers the property
relinquished in the exchange or "the due date (determined with
regard to extension) for the transferor's return of the tax imposed
by this chapter for the taxable year in which the transfer of the
relinquished property occurs". Petitioners admit that the transfer
of the replacement property (Murfreesboro Road property) to
petitioners occurred more than 180 days after they transferred
their interest in the two residential rental properties. Hence, it
is obvious that petitioners failed to satisfy the 180 day
requirement of section 1031(a)(3)(B)(i). See St. Laurent v.
Commissioner, T.C. Memo. 1996-150. (We note that section
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