What is Like Kind Exchange? "Like kind exchanges" are exchanges of property for the same kind of property. This is the most common kind of exchange that is nontaxable under the Internal Revenue Code. Like kind exchanges are not just for the wealthy taxpayers. Many taxpayers find themselves running into, or at least facing, the concept of like kind exchanges.

The concept of capital gains is a specification in the Internal Revenue Code that gives preferential treatment to the sales of certain specified assets. Why is this important? Because, if you buy a specified item and hold it for the specified period of time, the proceeds on the sale of the item are taxed at a rate that is preferable to the rate of many of the tax rates in effect at the time.