What is a Like Kind Property?

A like-kind property must be an investment property (Non-Owner Occupied), not a personal property (Owner Occupied).

According to the IRS:

“Both properties must be held for use in a trade or business or for investment. Property used primarily for personal use, like a primary residence does not qualify for like-kind exchange treatment.” (a second home or vacation home can qualify under strict IRS safe harbor guidelines)

 

According to the IRS like-kind property is defined as:

“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. For example, Commercial real property that is improved with an office building or unimproved vacant land is like-kind to a residential rental house. One exception for real estate is that property within the United States is not like-kind to property outside of the United States.

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*Disclaimer: Regal King Realty is NOT an Attorney at Law, CPA or Registered Financial Adviser and does NOT provide legal, tax or financial advice with respect to the purchase, sale or ownership of real property*

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