This tax worksheet examines the disposal of an asset and the acquisition of a replacement “like-kind” asset while postponing or deferring the gain from the sale if proceeds are re-invested in the replacement asset.

Qualifying property must be held for use in a trade or business or for investment. Property used primarily for personal use, like a primary residence or a second home or vacation home, does not qualify for like-kind exchange treatment.

Both properties must be similar enough to qualify as "like-kind." Like-kind property is property of the same nature, character or class. Quality or grade does not matter. Most real estate will be like-kind to other real estate.

Specific types of property are excluded from like-kind treatment:

• Inventory or stock in trade
• Stocks, bonds, or notes
• Other securities or debt
• Partnership interests
• Certificates of trust

For further assistance on this topic, click the Tax Flowcharts item group button and view the Like-Kind Exchange tax flowchart.

Was this article helpful?

Yes No

Submit