Like-kind refers to the nature or character of the property.
Examples of like-kind include rental properties such as
duplexes, triplexes, multi-unit apartment buildings,
office complexes, raw land, storage facilities, warehouses,
factories, hotels, marinas, farms, parking lots, shopping
Examples of non like-kind include primary residences,
second or vacation homes, stocks, bonds, notes or interest
in a partnership.
Exchangers can sell one property and acquire three or vice
Both properties must be held as a business use or investment
property for a minimum of one to two years.
USE OF A QUALIFIED INTERMEDIARY
A qualified Intermediary must be used to facilitate your
Qualified is defined as someone who is
not the taxpayer or an agent of the taxpayer
(realtor, attorney, accountant or tax advisor, broker,
lineal descendant, employee, etc.)
The Intermediary agrees to acquire the relinquished
property from the exchanger and convey it the buyer and
acquire the replacement property from the seller and
convey it to the exchanger.
USE OF A QUALIFIED ESCROW AGENT
Again, the escrow agent must be qualified, as defined above.
The exchanger cannot have actual or constructive receipt
of sale proceeds.
The exchanger is entitled to interest
the escrow account.
MUST ADHERE TO TIME LIMITATIONS
Identification Period begins at the closing of the
relinquished property and requires the written
identification of like-kind replacement property.
Exchange Period runs concurrently to the
45-day Identification Period and requires the
acquisition of the identified replacement property.