EXCHANGE OF LIKE-KIND PROPERTY: EXAMPLE
01.Core Concepts
Darrel inherited a piece of raw land from his great-grandfather and decided to convert that property to an income-producing property. Darrel later traded his raw land for an apartment building of equivalent value. Since he engaged in an exchange of like-kind property (realty for realty), the gain he realized on the raw land as of the date of the sale will be deferred into the apartment building under Section 1031.