Federal Income Tax Accounting
The 180-day rule refers to the time frame within which a taxpayer must identify and acquire replacement property in the context of like-kind exchanges and involuntary conversions. This rule is crucial as it dictates the specific period that a taxpayer has to reinvest the proceeds from the sale of their property into a new property to defer any tax liability on the gain. Understanding this timeline is vital for taxpayers looking to leverage these tax provisions effectively.
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