Definition: An exchange of qualifying real property held for investment or productive use in a trade or business for like-kind real property under Internal Revenue Code section 1031.
Example
An investor exchanges a qualifying rental property for other qualifying investment real estate using the required exchange structure.
Keep the distinction clear
A qualifying exchange generally defers gain; it does not erase it. Personal residences do not qualify, and cash or other non-like-kind property can create taxable gain.
Related terms
Boot (Like-Kind Exchange) · Adjusted Basis · Capital Gain
Keep studying
References: IRS: like-kind exchanges
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