Exchanges (or 1031 Like Kind Exchanges): What Are They?
The Like Kind Exchange is a transaction that involves property held for productive use in a trade or business or for investment (except inventory and stocks and bonds) for property of the same type. Unless different property is received (called boot), the exchange is nontaxable in the current year. Generally, if you exchange business or investment property solely for business or investment property of a like kind, no gain or loss is recognized under section 1031. Like Kind exchanges are often referred to as Starker Exchanges, Deferred Exchanges, Land Swaps and Trades. Discussion in this article is limited to real property, even though these IRS provisions are also used in many trades or businesses to trade fleets of equipment such as airliners, trucks, busses, and so forth. For those of you looking for wise investments in real estate, the Asheville area, the hottest market for second/vacation homes in the USA, could top your list! And, with just a little planning, the 1031 Exchange (or
