Like-Kind Property

Like-Kind Property

Properties of the same type that are not necessarily the same property. Under U.S. tax law, two parties may exchange like-kind property without being subject to capital gains taxes. For example, if a person trades a rusty 1993 Chevrolet Cavalier for a mint-condition 1968 Chevrolet Corvette, he will not be liable for capital gains taxes on the extra value of the Corvette because both properties are automobiles. However, if he then trades the Corvette for 100 acres of farm land, he is liable for capital gains taxes because cars and real estate are not like-kind properties.
References in periodicals archive ?
They also open up the possibility of assisting those clients in finding and purchasing a like-kind property.
An exchange facilitator would be anyone who facilitates, for a fee, an exchange of like-kind property.
A taxpayer is rarely willing to rely on just the transferee's unsecured promise to acquire like-kind property and will generally seek a guarantee of performance.
A member who contributed appreciated or depreciated property to an LLC does not recognize gain or loss upon distribution of the contributed property to another member if the contributor receives a qualifying distribution of like-kind property (Regs.
In general, these foregoing rules are complex, and tax advisors need to consult them in detail when counseling taxpayers in a step-by-step deferred exchange of like-kind property.
Tenancy-in-Common interest is considered like-kind property for purposes of a Sec.
After rejecting several properties in its attempt to find suitable like-kind property and with the closing date drawing near, Ocmulgee Fields assigned its rights to sell Wesleyan Station to Security Bank, a qualified intermediary, which in turn sold the property to the trusts.
Depending on your circumstances, it may be superior to a Charitable Remainder Trust, installment sale, private annuity, or like-kind property exchange in many respects.
IRC section 1031 permits the tax-free exchange of like-kind property.
The total consideration is the sum of the boot received and the fair market value of the like-kind property received or, if more clearly determinable, the total consideration is the fair market value of the asset given in the exchange.
Nor does uniqueness disqualify exchanges of personal property: a one-of-a-kind antique desk and a mass-produced modern desk are considered like-kind property under Prop.
1033(g)(1), real property that was held for productive use in a trade or business or as an investment that is involuntarily converted gives the taxpayer the ability to defer the gain if the property is reinvested in like-kind property instead of similar property.