Internal Revenue Code Section 1031 states: “No gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like-kind which is to be held either for productive use in a trade or business or for investment”.
“Like-kind” merely means that real property can be exchanged for any other real property. For example, you can exchange raw land for an office building. A single family residence can be exchanged for a triplex. A whole interest may be exchanged for a properly structured tenancy in common interest. One property may be exchanged for more than one property.
A vacation property or a primary residence may qualify as “like-kind” property, and qualify for tax free exchange treatment, provided certain guidelines are followed.
1031 EXCHANGE EXPLAINED
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PROPERTY THAT QUALIFIES
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REPLACEMENT PROPERTY CRITERIA
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TAX SAVINGS AND ECONOMIC BENEFITS
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ADVANTAGES OF EXCHANGE
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