In a like-kind exchange, like-kind property is used alone or like-kind property can be included with property, cash and liabilities that are not considered like-kind. If your exchange is not like-kind, this could trigger a taxable gain in the year of your exchange. In the same transaction, there can be deferred and realized gain if you exchange for a like-kind property with a lower value.
If you exchange for non-like-kind money or property, you need to recognize a gain on the other money and property received. You cannot recognize a loss. Properties can differ in quality and can still be considered like-kind no matter whether they have been improved or not.