Under the Tax Cuts and Jobs Act, (TCJA) the scope of the like kind exchange provisions of section 1031 has been considerably limited. Prior to the TCJA property subject to tax free exchange included depreciable tangible personal property, intangible and non-depreciable personal property and real property that is held for investment (i.e. real property held for sale may not be exchanged tax free under Section 1031). TCJA eliminated the first two categories of personal property, leaving only real property subject to tax free exchange treatment.
While the bulk of tax free exchanges under code section 1031 were for real estate and therefore will be unaffected by the new change, a segment of the exchange community was involved in large exchanges, i.e. airplanes, cruise ships, rental fleets etc. From now on those transfers will be subject to federal tax.