There is a way, however, of deferring payment of this tax, known as a "like-kind" exchange, under Section 1031 of the Internal Revenue Code. It's also called a Starker exchange or a deferred exchange.

Despite changing their investment from residential real estate to commercial property, this transaction qualifies as a like-kind exchange because it involves similar types of assets (real estate).

Like-kind exchange of agricultural property runs into a problem Taxpayers were not entitled to defer the gain from a likekind exchange because the property relinquished in the exchange was depreciated ...

A 1031 exchange is a real estate transaction where you trade a business-use property or one held as an investment property for a "like kind" property.

Like-kind property is defined as property of the same nature or character. Most, if not all, exchanges of real properties (buildings, land, etc.) qualify as like-kind exchanges.

Peabody argued that, since all real property is like-kind to all other real property, the transaction was tax-free. The court rejected this argument, noting that in prior cases the courts have held ...

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However, fewer exchange-traded fund investors get such an annual tax bill relative to those holding mutual funds. ETFs have these tax benefits due to "in-kind" transactions, experts said.