Introduction
Consider the following hypothetical: a sole Owner A of rentable house in Colorado considers buying a new lake LBJ house in Taxes. Instead of purchasing new house in Taxes and selling the older rentable house in Colorado, Owner A would like to process an exchange process for those two properties. He wants to take a benefit of like-kind exchange, because under Internal Revenue Code (IRC), like-kind exchange can defer gain and loss from the transaction. Therefore, it may save some tax cost. However, those IRC defined this nontaxable like-kind exchange in an extremely narrow range. Conflicts of the recognition of like-kind properties often happen between taxpayer and the Tax Count. Therefore, it may hard for owner A to take this tax advantage of like-kind exchange. This paper will focus on qualification issue of like-kind exchange. It will firstly briefly show the relevant Federal Income Tax code of like-kind exchange and highlight two controversial parts when those codes applying. Additionally, several relevant cases will be analyzed to show how like-kind exchange property is qualified in real world. Those cases also give Owner A some suggestions of house exchange. Finally, based on cases analyze above, a possible exchange plan of Owner A will be explained.

General Rule of Like-kind Exchange
IRS Code
In general, according to§1031(a), no gain of loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held either for productive use in a trade or business or for investment. Besides, property should be identified and this exchange should be completed within 180 days after transfer of exchanged property. In addition, exchange would include not only the like-kind property but also some other property, such as money