An exchange refers to the act of giving goods or services and receiving goods or services of equal value in return. It encompasses various contexts, including commercial transactions, securities trading, and tax-related property exchanges.
Like-kind property refers to properties that are of the same nature or character but may differ in grade or quality. In terms of taxation, like-kind properties can be exchanged without triggering immediate tax liabilities, typically under IRS Section 1031.
Section 1031 of the Internal Revenue Code addresses tax-free exchanges of certain properties, primarily real estate, provided specific conditions are met.
A Tax-Free Exchange, Delayed is a transaction where property is traded with the promise to provide a like-kind replacement in the near future, allowing deferral of tax on the gain under stringent conditions.
