2.) WHAT IS A 1031 "LIKE KIND" PROPERTY?
This means that business property or property held for investment, may be disposed of to a buyer (sold), set up with a "Qualified Intermediary", put into escrow, which will document the transaction as an exchange, and within the codified time frame, repurchase replacement property of "like kind" thereby completing the exchange. It is not required that exactly the same type of property is acquired. Like kind property that can be exchanged under the current meaning of Code Section 1031 includes a wide variety of PROPERTY THAT IS HELD FOR PRODUCTIVE USE IN A TRADE OR BUSINESS, OR, PROPERTY THAT IS HELD FOR INVESTMENT. "Like kind" property can include, but is not limited to any of the following, provided it is held for investment: commercial, single family rental property, condos, raw land, apartments, vacations home, second home, duplexes, industrial properties and a Leasehold Interest of 30 years or more.
A persons PRIMARY RESIDENCE does NOT come under the rules of Section 1031, and is specifically EXCLUDED, as is property held "primarily for resale" or dealer property.
A common misconception to "like kind" is that the properties being exchanged be of "similar use". This is simply not true. A commercial property can be exchanged for an apartment complex or bare land exchanged for a single- family rental.
