Commercial Property

Commercial property refers to real estate that is used for business or investment purposes, such as office buildings, retail spaces, industrial properties, and multi-family residential buildings. In the context of a 1031 exchange, commercial property is a type of like-kind property that can be exchanged for another qualifying commercial property without triggering immediate capital gains taxes.

A 1031 exchange, also known as a like-kind exchange, is a tax-deferred transaction that allows an investor to sell one investment property and use the proceeds to purchase another like-kind property. By doing so, the investor can defer paying capital gains taxes on the sale of the first property until they sell the replacement property. To qualify for a 1031 exchange, both the original property and the replacement property must be held for business or investment purposes and must be of like-kind.