Few tax events occur more frequently in farming and ranching than machinery trades. What is not always recognized is that such trades are almost always categorized as likekind exchanges and should be treated and reported as such.1 Moreover, the Department of the Treasury (and the Internal Revenue Service) have implemented more restrictive rules governing personal property like-kind exchanges than real estate exchanges although the latter, by their size, are usually given more attention. A recently litigated case, North Central Rental and Leasing v. United States2 has focused attention on the more questionable side of like-kind exchanges involving personal property including equipment used in a business where reliance is placed on qualified intermediaries to avoid the related party rule.
Harl, Neil E.
"Machinery Trades: Also a Like-Kind Exchange,"
Agricultural Law Digest: Vol. 26
, Article 1.
Available at: https://lib.dr.iastate.edu/aglawdigest/vol26/iss6/1