CES Like-Kind Property Requirements

Question 1

Under IRC Section 1031, which of the following best defines 'like-kind' property in a US exchange?

Accepted Answer

Property of the same nature or character, regardless of grade or quality

Answer

Property that is identical in use and location

Answer

Property with the same fair market value

Answer

Property owned for at least five years

Question 2

Which of the following is NOT eligible as like-kind property in a 1031 exchange?

Accepted Answer

A primary residence

Answer

A commercial office building

Answer

A vacant lot held for investment

Answer

Rental residential property

Question 3

Can US real property be exchanged for foreign real property in a 1031 exchange?

Accepted Answer

No, US real property and foreign real property are not like-kind

Answer

Yes, if both properties are investment properties

Answer

Yes, as long as the exchange value is equal

Answer

No, only commercial properties qualify

Question 4

Which statement about personal property and 1031 exchanges after the Tax Cuts and Jobs Act of 2017 is correct?

Accepted Answer

Personal property was eliminated from 1031 exchange eligibility

Answer

Personal property still qualifies for 1031 exchanges

Answer

Only vehicles qualify as personal property in 1031 exchanges

Answer

Personal property exchanges require IRS pre-approval

Question 5

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?

Accepted Answer

Yes, because both are US real property held for business or investment

Answer

No, because the properties have different uses

Answer

No, because ranch land and apartments are different property types

Answer

Yes, but only if both properties have the same square footage

Question 6

Which of the following property types qualifies as like-kind in a 1031 exchange?

Accepted Answer

A leasehold interest of 30 or more years

Answer

Stock in a real estate company

Answer

A primary residence upgraded for resale

Answer

Inventory held by a dealer