In a like-kind exchange, property owners must meet a number of conditions in order to be eligible to take advantage of this tax deferment. One criterion is for the exchange to be between "like-kind" properties. Which of the following exchanges represents an example of an eligible "like-kind" exchange?

Question

Quizplus · Accepted Answer

In order for an exchange to be considered "like-kind," the properties being exchanged must be of the same nature, character, or class. Option A represents a non-like-kind exchange because shares in a publicly traded REIT are not real property. Option B involves exchanging a retail property in one country for a retail property in another country, which is not eligible for like-kind exchange treatment. Option C also involves exchanging real property for a personal residence, which does not qualify for like-kind exchange treatment. Only option D involves exchanging one type of commercial property for another commercial property of the same nature and character within the same country, which satisfies the requirements for a like-kind exchange.

In a Like-Kind Exchange, Property Owners Must Meet a Number