Which of the following qualify as like-kind exchanges under § 1031? Improved for

Question

Which of the following qualify as like-kind exchanges under § 1031? Improved for unimproved real estate. Vending machine (used in business) for inventory. Rental house for personal residence. Business equipment for securities. Warehouse for office building (both used for business). Truck for computer (both used in business). Rental house for land (both held for investment). Ten shares of stock in Blue Corporation for 10 shares of stock in Red Corporation. Office furniture for office equipment (both used in business). Unimproved land in Jackson, Mississippi, for unimproved land in Toledo, Spain. General partnership interest for a general partnership interest.

Explanation / Answer

Answer:

a. Improved for unimproved real estate- Qualifies

b. Vending machine (used in business) for inventory- Does not qualify, inventory does not qualify as productive or investment property.

c. Rental house for personal residence- Does not qualify, an exchange of investment realty for a personal residence does not qualify.

d. Business equipment for securities- Does not qualify, securities do not qualify as productive or investment property.

e. Warehouse for office building (both used for business). – Qualfies

f. Truck for computer (both used in business)- Does not qualify, although the truck and the computer both are business personality they are not in the same general business asset class.

g. Rental house for land (both held for investment). - Qualifies

h. Ten shares of stock in Blue Corporation for 10 shares of stock in Red Corporation. – Does not qualify, stock does not qualify as like-kind property under 1031.

i Office furniture for office equipment (both used in business)- Yes. Both the o²ce furniture and o²ce equipment are personalty, and they are in the same general business asset class.

j Unimproved land in Jackson, Mississippi, for unimproved land in Toledo, Spain. -No. Real property located in the United States exchanged for foreign real property (and vice versa) does not qualify as like-kind property.

k. General partnership interest for a general partnership interest.-No. ±he exchange of partnership interests do not qualify as a like-kind exchange.

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