When to Use a Like-kind Exchange Nontaxable like-kind exchanges should be considered by taxpayers in any of the following situations: When a taxpayer intends to replace the real property with similar property. When the real property being disposed of has appreciated in value enough that a sale would result in a significant tax liability. When a taxpayer has nondepreciable, nonincome-producing property and wants to obtain depreciable, income-producing property. This may be particularly beneficial for taxpayers needing additional after-tax income during retirement. When a taxpayer wants to convert from trade or business real property (e.g., active in management) to investment real property (e.g., triple net lease property), or vice-versa.