A taxpayer exchanges an office building held as an investment asset for an office building to be used in her business.The exchange will qualify as like-kind.

Question

Quizplus · Accepted Answer

This is because the taxpayer is exchanging one real property asset for another real property asset, which qualifies as like-kind under Section 1031 of the Internal Revenue Code. As long as the other requirements for a like-kind exchange are met, such as using a qualified intermediary and identifying replacement property within certain timeframes, the taxpayer can defer paying taxes on any capital gains from the exchange.

A Taxpayer Exchanges an Office Building Held as an Investment