It's almost like deducting improvements to your New House right off gain on the Old House. This rollover reduces the basis of your New House. To illustrate, you can rollover gains on the sale of Old Houses as many times as you qualify under the rules. Double Replacement Rule . . . The Replacement Time Period continues to run for two years after the Old House is sold.
Nothing stops it except certain military and overseas situations.
If you buy a New House during this period, the Replacement Time Period continues to run. After moving into a new area, you may discover you don't like your first choice of a New House or perhaps it's location. In any event, you decide to buy another New House within the Replacement Time Period of the sale of the original Old House. Here's the special rule that covers this situation and how it works. If you sell your Old House at a gain, and buy more than one New House during the Replacement Time Period, only the last one counts as your replacement house for purposes of your IRC Section 1034 rollover.