Dating back to 1921, Internal Revenue Code §1031 allows investors to defer capital gains tax on the sale of an investment property by deploying the proceeds into a qualified replacement property(ies).
What once began with the swapping of horses and land amongst property owners, the definition of today’s “like-kind” exchange has expanded significantly. The term “like-kind” refers to the nature or character of the property, rather than it quality or grade. Property that is held for business or investment purposes will typically qualify.
