Wally's investment real estate was condemned on November 14,2015.On February 14,2016,he received $250,000 for the property that had a basis of $210,000.What is the last date that Wally can acquire replacement property to avoid gain recognition?

Question

Quizplus · Accepted Answer

Wally has until the earlier of 2 years after the condemnation (November 14, 2017) or the due date (including extensions) of the tax return for the tax year of condemnation to acquire replacement property. Therefore, the latest date for Wally to acquire replacement property and avoid recognition of gain is December 31, 2019 (2 years after the condemnation occurred on November 14, 2015).

Wally's Investment Real Estate Was Condemned on November 14,2015