IRC §1031 states that the relinquished and replacement property must be of “like-kind.” With respect to a 1031 exchange of real estate, all real property is like-kind. As long as the property is being used for investment and income purposes, and not as a primary residence, it can be exchanged. The types of property which the IRC recognizes to be of like-kind in nature include:
Residential or commercial properties held for rental or investment purposes, such as apartments, office buildings, or retail spaces, may qualify for a 1031 exchange.
Land held for investment or business purposes, whether undeveloped or with potential for future development, may qualify for a 1031 exchange.
Properties used for business purposes, including warehouses, industrial facilities, or mixed-use buildings, can be exchanged under 1031 rules.
Residential buildings with multiple units, such as duplexes, triplexes, or apartment complexes, held as investments are eligible for a 1031 exchange.
Agricultural land or ranches held for investment or business purposes can qualify for a 1031 exchange if used in a trade or business.
Properties used for retail purposes, such as shopping centers, strip malls, or standalone retail buildings, are eligible for a 1031 exchange when held for investment.
Commercial properties used for office space or professional services, whether single-tenant or multi-tenant, can be exchanged under the 1031 rules.
Properties used for manufacturing, distribution, or warehousing purposes, including factories, distribution centers, or industrial parks, may qualify for a 1031 exchange when held for investment or business use.
