Exchanges can also involve multiple properties. Property must be exchanged for like-kind property which means the same kind of property, such as a rental house for a rental house. You could exchange a duplex for an undivided interest in a shopping center. Or, perhaps a ranch for a downtown high-rise. The combinations are virtually limitless.
Tax deferred exchanges are difficult to accomplish and very few transactions actually qualify.
Under new IRS regulations and through the use of a qualifies intermediary, tax deferred exchanges are relatively easy to accomplish. Any investor who wants to sell property and re-invest in real estate should consider the benefits of a tax deferred exchange.