What Can Be Exchanged

Property used in a trade or business and investment property held for appreciation may be exchanged.

• Real Estate. Real estate including water, timber and mineral rights, easements and long-term leases.

Stocks, bonds and partnerships may not be exchanged. (See what cannot be exchanged?)

Examples of Real Estate Property

1. Fee Interest (which is an entire interest in real estate).
2. Fractional interests, such as a partial undivided interest as a tenant-in-common with other partial interest owners.
3. Leasehold interests that are 30 plus year leases. See Treas. Reg. 1.1031(a)-1(c). Permanent easements for conservation and right-of-ways, such as utility easements or towers. PLR 96-01-046.
4. Development rights. PLR 200805012.
5. Perpetual water and mineral rights. Revenue Ruling 55-749 , Oil & Gas rights.
6. Payment for Tobacco Quotas.
7. Air Rights. Revenue Ruling 54-575, Revenue Ruling 71-286.
8. Mitigation credits for the restoration of wetlands.
9. Rental houses in the U.S. for rental condominium units in the Virgin Islands. PLR 9038030.
10. Real property for 100% of interests in a partnership owning real property. PLR 200807005.
11. Fee simple interests in real property for fee simple interests in other real property subject to 99-year condominium leases.
12. Real property containing an operating sand mine for commercial rental property. Beerler v. Comm'r, TC Memo 1997-73.
13. Gold mine for a coal mine.
14. Commercial building for a condominium interest in a newly constructed commercial building.
15. Cooperative housing corporation stock for condominiums in the same physical property.
16. Deep water storage terminal facilities for similar facilities situated inland.
17. Timberland.
18. Unencumbered farm lands, farm buildings and unharvested crops together as one property.
19. Billboards / outdoor advertising displays.