Solomon C, Lao, CCIM.  Your Partner In Commercial Real Estate.

"Like-Kind" Property...

When an Exchanger is exchanging real property, "like-kind" is one of the advantages of §1031 exchanges. All real property is "like-kind" with all other real property. "Like-kind" refers to how the property is held by the investor, not the type or character of property. The Exchanger must have held the relinquished property for investment, or for "productive use in their trade or business," and intend to do the same with the replacement property. The following are examples of "like-kind" properties:

If the Exchanger is exchanging personal property the rules are far more restrictive. Definitions of what is considered real property and personal property can vary from state to state. It is essential to consult with a tax advisor when structuring personal property exchanges because one transaction may have multiple exchanges, involving tax deferral on both the personal and real property. Personal property is considered "like-kind" only if it appears in the same General Asset Class or Product Class. Therefore, the Exchanger may exchange: