Like-Kind Property Requirements Flashcards
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Read the first 6 Like-Kind Property Requirements flashcards as text
Under IRC Section 1031, which of the following best defines 'like-kind' property in a US exchange?
Answer: Property of the same nature or character, regardless of grade or quality
Like-kind refers to the nature or character of the property, not its grade, quality, or specific use.
Which of the following is NOT eligible as like-kind property in a 1031 exchange?
Answer: A primary residence
A primary residence is not held for business or investment purposes and does not qualify for a 1031 exchange.
Can US real property be exchanged for foreign real property in a 1031 exchange?
Answer: No, US real property and foreign real property are not like-kind
Since the Tax Cuts and Jobs Act of 2017, US real property and foreign real property are not considered like-kind.
Which statement about personal property and 1031 exchanges after the Tax Cuts and Jobs Act of 2017 is correct?
Answer: Personal property was eliminated from 1031 exchange eligibility
The TCJA eliminated personal property from 1031 exchange eligibility, limiting it to real property only.
A taxpayer wants to exchange a ranch used for business purposes for an apartment complex held for investment. Is this a valid like-kind exchange?
Answer: Yes, because both are US real property held for business or investment
Real property exchanged for real property qualifies as like-kind regardless of the specific use, as long as both are held for business or investment.
Which of the following property types qualifies as like-kind in a 1031 exchange?
Answer: A leasehold interest of 30 or more years
A leasehold interest with 30 or more years remaining (including renewal options) is considered like-kind to a fee simple interest.