Like-kind property must meet the definition set out by the Internal Revenue Service (IRS) to qualify for a Section 1031 transfer. The two assets must be of the same type but do not need to be of the same quality to qualify as like-kind property
Investors review multiple factors when identifying a property to purchase. If conducting a 1031 exchange, the pressure is only heightened by the 45-day window to identify. Limited resources and experience might prevent an investor from making the most of the tax code on the replacement property.