When to Exchange. A Tax deferred exchange is the simultaneous exchange of two pieces of property. Instead, a taxpayer has 45 days after the closing of the relinquished property to identify replacement property, and 180 days after the closing of the relinquished property to actually close on the purchase of the replacement property.
Exchanges can also involve multiple properties.
Property must be exchanged for like-kind property which means the same kind of property, such as a rental house for a rental house. You could exchange a duplex for an undivided interest in a shopping center. Or, perhaps a ranch for a downtown high-rise. The combinations are virtually limitless. Tax deferred exchanges are difficult to accomplish and very few transactions actually qualify.