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Classifying Like-Kind Property

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Like-Kind Property. Which of the following exchanges qualify as like-kind exchanges
under Sec. 1031?
a. Acme Corporation stock held for investment purposes for Mesa Corporation stock
also held for investment purposes
b. A motel used in a trade or business for an apartment complex held for investment
c. A pecan orchard in Texas used in a trade or business for an orange grove in Florida
used in a trade or business
d. A one-third interest in a general partnership for a one-fourth interest in a limited partnership
e. Inventory for equipment used in a trade or business
f. Unimproved land held as an investment for a warehouse used in a trade or business
g. An automobile used as a personal-use asset for marketable securities held for investment

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Solution Summary

This solution cites the Internal Revenue Code section which discusses the classes of like-kind property and applies that section to different property described.

Solution Preview

Treas. Reg 1.1031(a)-(1)(a) states that "Under section 1031(a)(1), property held for productive use in a trade or
business may be exchanged for property held for investment. Similarly, under section 1031(a)(1), property held for investment may be exchanged for property held for productive use in a trade or business. However, section 1031(a)(2) provides that section 1031(a)(1) does not apply to any exchange of ... stock in trade or other property held ...

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