Released April 2023 -
You can exchange certain real property for another property that’s the same type, or “like-kind”, without recognizing a taxable gain for the transaction. To qualify for a like-kind exchange, the real property you give up must be used for business or held for investment, and the property you receive must be of a similar nature and character. Properties can still be like-kind if they differ in quality, like an apartment building that hasn’t been updated and an apartment building that was recently remodeled. If you receive any money or other property that’s not like-kind in the exchange, you’ll recognize a gain only for the non like-kind assets.
