A like-kind exchange, also known as a Section 1031 exchange after the section of the Tax Code that governs it, is essentially a tax-deferral tool that postpones tax on the exchange of a property for another property of a “like kind.”
There are many reasons to consider a like-kind exchange as a tax planning tool, and CPAs are “tremendously involved” in the planning and execution of them, according to Steve Breitstone, partner and head of the tax practice at Mineola, N.Y.-based Meltzer Lippe. “Accounting firms are very active in helping their clients plan for the sale of property and structuring 1031 exchanges and other ways of deferring tax,” he said.
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