Final answer:
Like-kind property in a 1031 exchange refers to real estate held for business or investment that can be exchanged without immediate tax liability. Qualifying types include real property used in a trade or business and real property held for investment.
The correct option is d. real property held for investment.
Step-by-step explanation:
The question concerns the classification of like-kind property for the purpose of a 1031 exchange in the U.S. tax law. Like-kind property refers to two pieces of real estate that can be exchanged without the owner incurring a tax liability from the IRS. Real property, in this context, must be held for productive use in a business or for investment. Therefore, the correct option that qualifies as like-kind property is:
Real property used in a trade or business
Real property held for investment
However, personal use property and property located outside the United States do not qualify for like-kind exchanges. Investments such as a house, land, or even Japanese investors buying U.S. real estate represent the kind of property that can be exchanged provided they meet the criteria for being held for business or investment purposes.