Which of the following exchanges of property are like-kind exchanges?
I.Common stock of Intel traded for preferred stock of Intel.
II.Principal residence traded for 20 acres of undeveloped investment land.

A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.

Question

Which of the following exchanges of property are like-kind exchanges?
I.Common stock of Intel traded for preferred stock of Intel.
II.Principal residence traded for 20 acres of undeveloped investment land.
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A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.

Quizplus · Accepted Answer

Like-kind exchanges under U.S. tax law typically involve real property used for business or investment purposes. Common stock for preferred stock is not considered like-kind because they are both securities, not real property. A principal residence for investment land is also not like-kind because the properties have different uses (personal vs. investment).

Which of the Following Exchanges of Property Are Like-Kind Exchanges