Due to the broad definition of “like-kind” for real property exchanges, these types of exchanges are generally one of the most common. In general, any type of U.S. real property interest held by the client for productive use in a trade or business, or for investment purposes can be exchanged for another real property interest regardless of its grade or quality and as long as the property to be exchanged is considered real property under the state law in which the property is located. For most real property exchanges the taxable gain is due to a combination of the appreciation in value and the amount of depreciation taken over the period of time that it was owned by the client. The following are examples of the wide variety of real property interests that are deemed to be of “like-kind” and that can be exchanged: vacant land, agricultural land, office buildings, industrial parks, apartment buildings, single family rentals, 30 year ground leases, retail malls, undivided fractional interests, mineral rights, oil fields, air rights and development rights.

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