Like Kind - Real Property Exchange
The fundamental advantages of a tax deferred exchange may be utilized
to diversify, consolidate or leverage your investment portfolio. With
respect to real property, the broad definition of "like kind"
provides investors with numerous options to accomplish their investment
goals.
Properties that qualify for IRC 1031 treatment
IRC 1031 provides that to qualify for
tax deferred treatment, the relinquished property must be exchanged for
replacement property that is like kind. Like kind means similar in nature
and character notwithstanding differences in grade or quality. The fact
that any real estate involved is improved or unimproved is not material
for that fact relates only to the grade or quality of the property and
not its kind or class. As such, raw land held for investment may be exchanged
for single-family rentals used for a trade or business or any combination
of the following:
- Single Family Rentals
- Farms/Ranches
- Office/Commercial
- Motels/Hotels
- Golf Courses
- Some Recreational Properties
- Multi Family Rentals
- Raw Land
- Retail/Industrial
- Leasehold Interest of 30 years or more
Please contact one of our offices to speak with an exchange professional
to discuss the like kind requirements for your real property transaction.