Celebrating 100 Years of Like-Kind Exchanges

This year marks the 100^th anniversary of like-kind exchanges in the Internal Revenue Code. The amended 1984 Internal Revenue Code eventually codified delayed exchanges and the identification and completion timeframes, and the 1991 Treasury Regulations included the creation of the qualified intermediary safe harbor. Two of the original primary purposes behind the creation of the like-kind statute in 1921 were: 1) to avoid unfair taxation of ongoing investments in property and 2) to encourage active reinvestment. These purposes are even more relevant today. The ability to defer payment of tax on the continuation of investment has been a vital tool in providing liquidity in the real estate market and “[N]ow, more than ever, Section 1031 is needed to help the real estate market and the economy recover from the COVID-19 pandemic,” said FEA President Julie Baird.

Read the full press release from the Federation of Exchange Accommodators (FEA).

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