For a like-kind exchange, realized gain is deferred if the exchange is solely for like-kind property.

Question

Quizplus · Accepted Answer

The IRS allows taxpayers to defer realized gain on a like-kind exchange if the exchange is solely for like-kind property. This means that if a taxpayer exchanges a property for another property that is similar in nature or character, they are not required to pay taxes on the gain they realized from the initial property at the time of the exchange. Instead, the gain is deferred and will be recognized when the taxpayer eventually sells the replacement property.

For a Like-Kind Exchange, Realized Gain Is Deferred If the Exchange