LIKE KIND PROPERTY USED FOR BUSINESS OR HELD FOR INVESTMENT 

To achieve your tax deferral, you must reinvest in like kind property. Any property considered real estate under the laws of your state will be like kind to any other real estate. In Texas, an exchange of a condominium for water rights or an exchange of an oil well for an interest in a long-term lease would both meet the like kind requirement.

Additionally, both the old and new properties must be used for business or investment purposes. This means that your principal residence cannot be used in an exchange nor can you acquire property that you intend to resell immediately.