qualified replacement property
(14) Treatment of replacement property acquired in section 1031 or 1033 transactions (A) In general In the case of any qualified replacement property, any period during which there was ownership, qualified use, or material participation with respect to the replaced property by the decedent or any member of his family shall be treated as a period during which there was such ownership, use, or material participation (as the case may be) with respect to the qualified replacement property. (B) Limitation Subparagraph (A) shall not apply to the extent that the fair market value of the qualified replacement property (as of the date of its acquisition) exceeds the fair market value of the replaced property (as of the date of its disposition). (C) Definitions For purposes of this paragraph— (i) Qualified replacement property The term “qualified replacement property” means any real property which is— (I) acquired in an exchange which qualifies under section 1031, or (II) the acquisition of which results in the nonrecognition of gain under section 1033. Such term shall only include property which is used for the same qualified use as the replaced property was being used before the exchange. (ii) Replaced property The term “replaced property” means— (I) the property transferred in the exchange which qualifies under section 1031, or (II) the property compulsorily or involuntarily converted (within the meaning of section 1033 ).