Category Archives: FAQ

Section 1031 of the Internal Revenue Code provides that no gain or loss is recognized if property "held for productive use in a trade or business or for investment" is traded solely for the "like-kind" property that also is to … Continue reading →

The primary advantage of exchanging under I.R.C. Section 1031 is the preservation of working capital. If you sell property you must pay taxes on any recognized gain. These funds will no longer be available to you for investment. The capital … Continue reading →

If and when you elect to sell, as opposed to exchange, your replacement property, then the deferred gain will become taxable. With proper planning, you may defer the tax for your entire investment career.

Generally, all real property is "like-kind" to all other real property within the US. Like kind property is property which is not identified as your personal residence or second home, and was not acquired for resale or considered inventory or … Continue reading →

The words "like-kind" refer to the nature of your use of the property, not it’s character, grade or quality. For example, real property is not of like kind to personal property because they are of a different nature and character. … Continue reading →

Since the Code does not clearly define the term "held for productive use in a trade or business or for investment," the definition is subject to interpretation and has given rise to great uncertainty. Unproductive real estate that is "held … Continue reading →

Yes. The following property is specifically excluded under I.R.C. Section 1031 and therefore cannot be of "like-kind": Stock in trade or other property held primarily for sale Stocks, Bonds, Notes or other Securities or Evidence of Indebtedness or Interest Interests … Continue reading →

No. Personal residences are subject to their own special rules, and cannot be exchanged under I.R.C. Section 1031.

In addition to the non-qualifying property previously discussed, examples of property which probably will not meet the qualified use test are: Land which was acquired for the express purpose of subdivision and resale and was only held long enough to … Continue reading →

As a result of the Revenue Reconciliation Act of 1989, real property within the United States and real property located outside of the United States are no longer of like kind. However, foreign property may still be exchanged for other … Continue reading →