Like-kind exchanges are new and different. The recently enacted Tax Cuts and Jobs Act (TCJA) changed trade-in reporting.

In a like-kind exchange, a taxpayer doesn’t recognize gain or loss on an exchange of like-kind properties, if both the relinquished property and the replacement property are held for productive use in a trade or business.

For exchanges completed after December 31, 2017, however, the TCJA limits tax-free exchanges to exchanges of real property. Real property is land and any property attached directly to it. The real property cannot be held primarily for resale, however.

Personal property and intangible property no longer qualify for tax-free like-kind exchanges. Personal property is movable property. Personal property includes any asset other than real estate. Intangible property is something of value that cannot be touched, like patents, designs, and brand recognition. So, for example, the trade-in of one business vehicle for another business vehicle is now a taxable event, recognizing any gain or loss upon the transaction.

With over 20 years of experience in public accounting, Amanda Bechen CPA owns Bechen & Company PC located in Wagner, SD, and can be contacted at 605-384-4200 or www.bechenco.com.