Are raw land and office buildings “Like Kind”?
Yes. All real property is considered to be “Like Kind” to all other real property. Personal property, however, is not “Like Kind” with real property and personal property is not “Like Kind” to other personal property excepting personal property of the same “Class” and “Kind”. Since all real property is “Like Kind” a tenant in common interest may be exchanged for a fee simple interest, one property may be exchanged for one or more properties, a duplex may be exchanged for a four plex, a single family house may be exchanged for a motel, and any other combination of real property may be exchanged for other real property. In order for property to qualify for treatment pursuant to Section 1031 the property must meet two requirements. The like kind requirement and the purpose requirement. The purpose requirement mandates that “Like Kind” property must be held by the taxpayer for the productive use in trade or business or for investment. This applies to both the relinquished property and the
