In general, no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held for productive use in a trade or business for investment.
Exception is that this does not apply to inventory primarily held for sale, stocks, bonds or notes and interest in a partnership. NOTE: This code section includes losses; it is not an elective provision.
Other requirements include:
- Property to be received in the exchange must be identified on or before 45 days after the date which the taxpayer transfers the property relinquished in the exchange.
- The identified property must be received no later than 180 days after the taxpayer transfers the property relinquished in the exchange.
