like-kind exchange

Like-for-Like Sales

The comparison of a company's sales over a given period of time to the sales from a different period of time that resulted from the same or similar activities. For example, if a company has $3 million in sales in 2009 from its flagship store, this is compared to its sales from the same flagship store in 2008 and not to any of its satellite stores. Comparing like-for-like sales ignores the effects of expansion or other changes in activities that could distort comparisons from year to year.

Tax-Free Exchange

Under Section 1031 of the Internal Revenue Code, the exchange of two assets of like kind, even if of different quality, that are used for a business or for investment purposes. The goods exchanged are not assessed capital gains taxes. More precisely, capital gains taxes are deferred until an asset is resold with no intention of reinvestment. Tax-free exchanges also apply if one sells an asset with the intention to use the proceeds to buy a similar asset. For example, if a farmer sells his farm and uses the money to buy another farm, capital gains taxes are likely deferred on the money he made on the sale of the first farm. The same would be true if the he traded farm for farm.

like-kind exchange

Under IRS regulations,property held for productive use in a trade or business or for investment that is exchanged solely for similar property.Any real estate (except your personal residence) is considered like-kind to any other real estate. Encountered in the context of a 1031 exchange, if you sell a piece of real estate, and then buy another piece within certain strict time limits and following very specific rules,then you will not have to pay income taxes on the first sale. Taxes will be paid when you sell the second property,unless you do another 1031 exchange.In that case,tax payment will be delayed again.See also 1031 exchange.

Example: In real estate, all real estate except one's personal residence(s) is considered “like kind” to all other real estate. City property is “like kind” to farm property; unimproved real estate is “like kind” to improved real estate. On the other hand, shares in a REIT are not considered real estate for the purposes of a like-kind exchange. In addition, a long-term lease of less than 30 years is not considered real estate, and a life estate expected to last less than 30 years is not considered real estate, for purposes of these rules. (For more information, see Publication 544, “Sales and Other Dispositions of Assets,” available at the IRS Web site, www.irs.gov.)

Like-Kind Exchange

An exchange of property held for productive use in a trade or business or for investment (except inventory and stocks and bonds) for property of the same type. Unless different property is received (called boot), the exchange is nontaxable in the current year. Any gain or loss is not recognized until the property received in the exchange is sold or disposed of. Like-kind exchanges are reported on Form 8824.
References in periodicals archive ?
The company intends to reinvest the proceeds from the Wawa Sale through the 1031 like-kind exchange structure.
Further, the proceeds of this transaction will be used through an Internal Revenue Code Section 1031 like-kind exchange (1031-Exchange).
The company funded the acquisition with proceeds from the recent sale of the Residence Inn Greenbelt, MD as part of a tax-deferred like-kind exchange. In addition, the seller of The Ritz-Carlton, Coconut Grove provided financing to the company with an installment note for USD 3.5m.
Schneiderman announced yesterday that an investigation by his office found that Roshan Zamir wrongfully deferred payment of New York State and local income taxes by disguising withdrawals of $3.5 million from a like-kind exchange and by disguising $5 million in equity contributions as loans.
1031 exchange, otherwise known as a 1031 exchange or like-kind exchange, occurs if, within 180 days, an asset being relinquished is replaced (i.e., exchanged) with an asset of like kind.
Further supporting this conclusion, the IRS has ruled in Letter Rulings 9252001 and 200151017 that the nonrecognition treatment for a like-kind exchange may be carried over to a successor corporation.
In transactions like these, the individuals may decide whether to participate in the like-kind exchange or to cash out of their investment.
However, the exchange of a numismatic coin for a bullion-type coin is not a like-kind exchange. (4) Likewise, the exchange of gold bullion for silver bullion does not qualify as a like-kind exchange, since silver and gold are intrinsically different metals and are used in different ways.
If a corporation separately reports a sale and a purchase for financial statement purposes and a portion of the transaction qualifies for like-kind exchange treatment for federal income tax purposes, is a taxpayer expected to bifurcate the financial reporting gain and report a portion in column (A) of line 15 with the balance in column (A) of line 29?
In a like-kind exchange, investment property is traded for other investment property.
The transaction is expected to be part of a 1031 like-kind exchange. Including the Reston Property, the Company has invested approximately $76M year-to-date or approximately 76% of the mid-point of the Company's 2019 guidance for the acquisition of income-producing assets.
This acquisition completed the 1031 like-kind exchange utilizing the remaining proceeds from the company's recent disposition of the property in Lexington, North Carolina, that was leased to Lowe's and is also expected to be a part of the like-kind exchange utilising proceeds from the anticipated closing of the disposition of fourteen properties previously announced by the company.