What is “like-kind”?
On real property “like-kind” can be any property held for business, trade or for investment purposes! This would exclude only your principal residence for real property exchanges. Like-kind for personal property is much more specific in that a cow can be exchanged for a cow — not a bull, an airplane for an airplane, etc.
The words “like-kind” refer to the nature or character of the property, not its grade or quality. For example, real property is not of like-kind to personal property because they are of a different nature and character. Conversely, vacant land, for example, is of like-kind to improved property as the two differ only in their grade/quality. Raw land, condominiums, single family residences, shopping centers, apartment buildings, farm and ranch land, commercial real estate, industrial property, second homes converted to investment property, and almost all other realty are of like-kind with respect to their intrinsic nature and character and may, therefore, be interchangeably exchange. With limited exceptions, any real estate meeting the above tests can be exchanged for any other real estate. In addition, the rules excepting incidental property from the identification requirements should not be construed as meaning such property will be considered like-kind realty. Remember, the final regu
