WHAT IS “LIKE-KIND” PROPERTY?
- By Tom MacKillop
- Published December 15th, 2009
There is some confusion regarding what type of
property qualifies for a §1031 tax deferred exchange. The Internal Revenue Code
Section 1031 states that “no gain or loss shall be recognized on the exchange
of property held for productive use in a trade or business or for investment if
such property is exchanged solely for property of like kind which is to be held
either for productive use in a trade or business or for investment.”
“Like-kind” property can include, but is not limited to, any of the following,
provided it is held for investment:
* Single Family Rental
* Duplex
* Apartment
* Commercial Property
* Raw Land
For example, raw land can be exchanged for a single-family rental, or apartments or a commercial building. Properties can be exchanged anywhere within the United States. Selling an investment property and trying to do a 1031 exchange to purchase a primary residence does not directly qualify. Taxpayers can do a 1031 exchange into residential income and then convert it at a later date to their primary residence http://www.tm1031exchange.com/
* Duplex
* Apartment
* Commercial Property
* Raw Land
For example, raw land can be exchanged for a single-family rental, or apartments or a commercial building. Properties can be exchanged anywhere within the United States. Selling an investment property and trying to do a 1031 exchange to purchase a primary residence does not directly qualify. Taxpayers can do a 1031 exchange into residential income and then convert it at a later date to their primary residence http://www.tm1031exchange.com/
