"Reverse Starker" Like Kind Exchanges
The 1979 decision of Starker v. United States revolutionized the world of like-kind exchanges by allowing the replacement property to be acquired months or even years after the disposition of the property disposed of in the exchange. While the Congress later limited the Starker exchange approach by imposing limits on the identification of the replacement property (on or before 45 days after the date of transfer of the property given up in the exchange) and on the time within which the replacement property must have been received (the earlier of 180 days after the date of transfer of the taxpayer’s property or the due date, including extensions, of the transferor’s tax return for the tax year in which the transfer occurred), neither the Congress nor the Internal Revenue Service had officially addressed the possibility of a “reverse Starker” like-kind exchange until publication of Rev. Proc. 2000-377 in September of 2000. So-called reverse-Starker exchanges commonly involve acquiring the replacement property before relinquishing the property to be disposed of in the exchange.