For real estate, like-kind refers to the nature of the property, not its grade or quality. All U.S. real property held for investment or business use is generally like-kind to all other U.S. real property held the same way. The building type is irrelevant.
Trades that all qualify
- A single-family rental for farmland
- Raw land for an apartment building
- A strip mall for an industrial warehouse
- One rental house for three condos (or the reverse)
- A rental for a fractional Delaware Statutory Trust interest or a tenant-in-common share
- A fee-simple property for a 30+ year leasehold interest
What doesn't qualify
- Your primary residence — it isn't held for investment (Section 121 is the homeowner's rule).
- Flips and dealer inventory — property held primarily for resale.
- Foreign property — U.S. real estate is only like-kind to U.S. real estate. (Foreign-for-foreign can qualify separately.)
- Anything that isn't real estate — since 2018, equipment, vehicles, franchises, and crypto are all out.
- REIT shares and partnership interests — these are securities, not real property. (The 721 UPREIT route is the workaround.)
The real test is how you hold it
Since nearly all real estate is like-kind to all other real estate, the qualifying question is rarely "is a warehouse like-kind to a duplex?" It's "was this property genuinely held for investment?" Rental history, how you reported it on tax returns, and how long you held it are the evidence. Vacation homes with heavy personal use and quick flips are where exchanges actually get challenged — see the vacation home rules.
See what an exchange saves on your property →Any qualifying property works in the calculator — rental, land, or commercial