THE PROPERTY MUST BE "LIKE-KIND"
Replacement property acquired in an exchange must be like-kind to the property being relinquished. The words "like-kind" refer 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.
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. Below is a list of properties that can all be exchanged with one and other:
- Single-Family Rentals
- Industrial Buildings
- Golf Courses
- Retail Space
- Farms and Ranches
- Hotels and Motels
- Leases with 30 years +
- Multi-Family Rentals
- Offices
- Land
