What are the 1031 like-kind exchange requirements to qualify for a withholding exemption?
To qualify for an exemption of withholding for a like-kind or deferred like-kind exchange, the seller needs to exchange qualifying property for like-kind property. • Qualifying property is property held for investment or productive use in a trade or business. • Like-kind property is property of the same nature or character, even if it differs in grade or quality. If the seller receives taxable proceeds (boot) exceeding $1,500 from the sale, then withholding is required on the boot. For more information, see IRC Section 1031 and IRS Publication 544, Sales and Other Dispositions of Assets.
