Detailed Answer
(d) The requirement is to determine which exchange
qualifies for nonrecognition of gain or loss as a like-kind exchange.
The exchange of business or investment property solely
for like-kind business or investment property is treated as a nontaxable
exchange. Like-kind means “the same class of property.”
Real property must be exchanged for real property, and personal
property must be exchanged for personal property. Here, the
exchange of rental real estate is an exchange of like-kind property,
even though the real estate is located in different states. The likekind
exchange provisions do not apply to exchanges of stocks,
bonds, notes, convertible securities, the exchange of partnership
interests, and property held for personal use.