Posted by MikeT SWFLA on February 08, 2002 at 08:30:12:
This is from 1031company.com, a friend of mine here in the Fort Myers, Fla. area…
"General Rule: All real estate in the United States is like-kind property.
Section 1031 makes no distinction in qualities of real estate. Therefore a city lot is like-kind to farmland; and improved property is like-kind to a vacant lot.
Even though a transaction meets the “like-kind” requirement, the Taxpayer must still meet all the other requirements of §1031 (i.e., holding; purpose) before a transaction can qualify for tax deferred treatment.
Real estate located in a territory of the United States (e.g., Puerto Rico) is not like-kind to real estate in the 50 states. Foreign real estate is not like-kind. Interests in a partnership are not like-kind.
PRODUCTIVE USE IN TRADE OR BUSINESS OR FOR INVESTMENT
Property that is the subject of an exchange must be held for a proper purpose, namely for “productive use in a trade or business, or for investment.”
In determining the use for which property is held, the key factor is how the Taxpayer intends to use it.
Look to the intent of the Taxpayer at the time of the exchange, as well as the trade or business of the Taxpayer.
The use by any other party is immaterial.
The IRS also looks at how long the Taxpayer “held” the property prior to the exchange.
Although there are no regulations on this point, the IRS often takes the ID position that property owned for less than two years was not “held” by the Taxpayer within the meaning of §1031. Each property should be looked at on a case by case basis."