The IRS page 'Like-kind exchanges - Real estate tax tips,' last reviewed or updated May 1, 2026, says a like-kind exchange of real property used for business or held for investment, solely for other business or investment real property of the same nature or character, has long been permitted. Generally, if you make a like-kind exchange, you are not required to recognize a gain or loss under Internal Revenue Code Section 1031. If you also receive other property or money, you must recognize gain to the extent of that other property and money, and you cannot recognize a loss. Under the Tax Cuts and Jobs Act, the page says Section 1031 applies only to exchanges of real property, not to personal or intangible property, effective January 1, 2018. Real property held primarily for sale does not qualify. Real properties are generally like-kind whether improved or unimproved. The page's example is that an apartment building would generally be like-kind to another apartment building. Real property in the United States is not like-kind to real property outside the United States. This is general information. A CPA, a qualified intermediary, and an attorney decide how it applies to a given sale.
The IRS page 'About Form 8824, Like-Kind Exchanges,' last reviewed or updated August 27, 2026, says to use Parts I, II, and III of Form 8824 to report each exchange of business or investment property for property of a like kind. Lenders care because the replacement closing has to land while the exchange is still open, and because the cash and the debt the seller receives can change the tax result the CPA is tracking. This note does not calculate that result and does not print a day count the tips page did not state. The statewide exchange note is Arizona 1031. A Phoenix replacement is a different city: Phoenix 1031. The market page is Tucson.
What Tucson investors actually buy, and what the lender still underwrites
The collateral is the Tucson asset: apartments of five or more units, an industrial building, a retail center, or a medical office. Each one is a different rent roll. An exchange deadline does not make a weak lease into a life-company file. If the date is the constraint, a bridge with a later permanent loan is a structure to discuss, not a tax opinion. Acquisition mechanics, separate from the exchange, are Tucson acquisition. How a closing is sequenced in Arizona, without a promised number of days, is Arizona commercial loan closings. The local capital picture is Tucson CRE financing.
Debt that is paid off, or a new loan that is smaller than the old one, can be part of what the IRS page calls other property or money. Do not ask this office to measure it. Ask the qualified intermediary and the CPA, and tell the lender the outside date they give you. A term sheet is not an exchange document.
Who does not give the tax advice
Capital Market Funds does not act as a qualified intermediary, does not prepare Form 8824, and does not tell you that a particular Tucson building is like-kind to the property you sold. Those are professional questions. We arrange the mortgage with the capital source that will actually look at the Tucson collateral: a bank, a life company, a conduit, or a private bridge lender. Agency apartments, if they qualify, are arranged with an approved lender. Capital Market Funds is not a Fannie Mae DUS lender.
One-to-four-unit houses are outside this note even if an investor hopes to exchange into them. The office is in Scottsdale. NMLS 1445066. Sending a purchase contract does not start the exchange and does not commit a lender.
Tucson market context
- University of Arizona
- The University of Arizona’s main campus is in Tucson. A Tucson apartment near the university is still underwritten to occupancy and the program. The published Tucson multifamily loan is a life-company value-add card, not a campus project and not a Fannie Mae loan. University of Arizona