Does Terry's holding period for the new real estate begin on the acquisition date of the original property?

Terry's holding period for the new real estate begins on the acquisition date of the original property because of the concept of "tacking" in real estate transactions. When a property is exchanged, particularly in like-kind exchanges under Section 1031 of the Internal Revenue Code, the holding period of the original property carries over to the newly acquired property. This means that Terry does not start a new holding period upon acquiring the new property but continues from the original holding period.

This aspect of tax law is designed to facilitate long-term investments and prevent unnecessary tax consequences from transactions that are essentially extensions of the same investment. Therefore, in this context, Terry's holding period indeed begins on the acquisition date of the original property, resulting in a continued investment strategy without resetting the timeline for tax purposes.