This report provides the REALTOR® perspective on 1031 like-kind exchanges. The like-kind exchange provision in the IRS tax code allows for the deferral of tax owed on any gain from the sale of a real estate property as long as the proceeds are reinvested in a similar property.
- For a significant proportion of real estate market participants, like-kind exchanges (LKE) provide an important vehicle to dispose and acquire property.
- Like-kind exchanges are available to individuals, partnerships, corporations, limited liability companies, as well as trusts.
- The main requirement of a like-kind exchange is that the disposition of one property and acquisition of another property must be part of an integrated transaction, rather than two individual transactions.
- REALTORS® are active participants in like-kind exchanges as investors, brokers and agents, intermediaries and professional advisors.