“Like-Kind” Property

properties
  • 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.