Like-Kind Exchanges (LKEs)

Like-kind exchange rules allow taxpayers to defer tax when they exchange one property held for investment or business use for another property of a “like kind.” Since 1921, the tax code has allowed taxpayers to defer capital gains on these exchanges. Today, LKEs are central to real estate markets and play a critical role in financing the improvement and modernization of U.S. real estate.


LKEs are fundamental to the health and financing of commercial real estate; they spur capital investment, particularly during market corrections and liquidity shortages. These rules promote savings and investment, allow capital to flow freely and efficiently, encourage commerce, and ultimately stimulate U.S. economic growth and job creation.

LKEs also allow businesses to grow organically with less unsustainable debt by reinvesting gains on a tax-deferred basis in new and productive assets. In this way, like-kind exchanges create a ladder of economic opportunity for minority-, veteran-, and women-owned businesses as well as cash-poor entrepreneurs who may lack access to traditional sources of financing.

Congress should support healthy real estate markets and property values by preserving the current tax treatment of like-kind exchanges. Real property like-kind exchanges (Section 1031) should be retained in any future tax reform efforts.


Like-kind exchanges support healthy real estate markets and important social and environmental objectives, such as the preservation of family-owned farms and ranches and the conservation of land for the benefit of the public and future generations.

Academic research has found that nearly 20% of all commercial real estate transactions involve a like-kind exchange. Exchanges get languishing properties into the hands of new owners who will invest in job-creating capital expenditures and improvements that put properties to their best and most productive uses.

Exchanges helped stabilize property markets at the height of the COVID-19 lockdown and are facilitating a faster and smoother transition as many real estate assets are re-purposed in the post-COVID economy.

The Roundtable, through the broad-based Real Estate Like-Kind Exchange Coalition, has sponsored critical academic and outside research on LKEs and their economic impact. The coalition has also sponsored bipartisan briefings for congressional staff, submitted testimony, and written detailed letters to lawmakers on the benefits of LKEs.


For more information and recent updates, reference our resources below.

Capital Gains
Like-Kind Exchanges (LKEs)
Partnerships & Pass-Through Taxation
Carried Interest
Step-Up in Basis
Opportunity Zones (OZs)
Unrealized Gains ("Billionaire Tax")