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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 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 ...

    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.

    $2.19

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