What is meant by Like-Kind property in a 1031 Exchange?
For real property exchanges, the like-kind requirement dictates that both the relinquished and the replacement properties have to be property that is used in a trade or business or held for investment. For example, apartment buildings may be exchanged for raw land or a warehouse can be traded for a self-storage facility. Basically, any sort of real may be swapped for any other property so used or held that qualifies as real estate under local law (i.e., the law of the state in which the replacement property is located).
