Qualified Replacement Property

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Qualified Replacement Property

A property of the same type that is not necessarily the same as another property. Under U.S. tax law, a qualified replacement property is not subject to capital gains taxes. For example, if a person trades a rusty 1993 Chevrolet Cavalier for a mint-condition 1968 Chevrolet Corvette, the Corvette is a qualified replacement property. The person will not be liable for capital gains taxes on the extra value of the Corvette because both properties are automobiles. See also: Like-Kind Exchange.
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