Like-Kind Personal Property refers to personal property that is exchanged for other personal property of the same nature, character, or class, without recognizing taxable gains or losses. This is in accordance with Section 1031 of the Internal Revenue Code, which allows taxpayers to defer capital gains taxes when selling an investment property and reinvesting the proceeds in a similar or “like-kind” property.

However, it’s essential to note that the Tax Cuts and Jobs Act (TCJA) of 2017 made significant changes to the treatment of personal property in 1031 exchanges. As of January 1, 2018, like-kind exchange treatment has been limited to real property (real estate) used in a trade or business or held for investment. Personal property, including vehicles, equipment, and other tangible property, is no longer eligible for like-kind exchange treatment under Section 1031.

Before this change, the like-kind personal property in a 1031 exchange had to meet specific criteria to be considered of the same nature, character, or class. It did not have to be identical but needed to be similar in nature or quality, with uses and characteristics that were considered alike.

So, while Like-Kind Personal Property was once a relevant concept in 1031 exchanges, it has been effectively phased out for exchanges occurring after 2017.