“Like-Kind” Property

  • Replacement Property acquired in an exchange must be “Like-Kind” to the property being relinquished. The term “Like-Kind” refers to the nature or character of the property and not to its grade or quality.
  • In an Exchange, “Like-Kind” only applies to real property that has been used for business, trade, or investment purposes. Almost all real estate qualifies for an exchange, with the exception of your primary residence.
  • There is some flexibility in this definition. Although the properties involved in an exchange must be “Like-Kind”, they do not need to be exactly alike.

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