Like-Kind Property


DEFINITION of 'Like-Kind Property'

Any two assets or properties that are considered to be the same type, making an exchange between them tax free. To qualify as like kind, two assets must be of the same type (e.g. two pieces of residential real estate), but do not have to be of the same quality.

BREAKING DOWN 'Like-Kind Property'

For example, you can exchange your car for another car tax free, but if you exchange your car for a piece of land, you could be subject to capital gains tax. Similarly, if you sell your car and then reinvest the proceeds back into another car, you should be able to avoid paying taxes on any gains incurred. In the U.S., this type of like-kind transfer can be accomplished by what is called a Section 1031 exchange.

  1. Real Estate

    Land plus anything on it, including buildings and natural resources.
  2. Unrecorded Deed

    A deed for a tangible piece of property that is not filed with ...
  3. Like-Kind Exchange

    A tax deferred exchange that allows for the disposal of an asset ...
  4. Fair Market Value

    The price that a given property or asset would fetch in the marketplace, ...
  5. Commercial Real Estate

    Property that is used solely for business purposes. Examples ...
  6. Section 1031

    A section of the U.S. Internal Revenue Service Code that allows ...
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