Under the general rules of Like Kind Exchange (“LKE”), no taxable gain (or loss) is recognized, and no tax is due, where property held for use in a trade or
Like Kind Exchange for Equipment Lessors
If you dispose of an business asset and subsequently reinvest your sales proceeds to acquire a "like-kind" replacement asset of equal or greater value, then the recognition of taxable gain (along with the lessor's obligation to pay tax on that gain) is deferred until the replacement asset is sold or, in the case of subsequent follow on exchanges, until the replacement's replacement asset is sold in a taxable disposition.
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