Just three years after the income tax code of 1918 the first Like-Kind Exchange took place. It was the 1921 tax act which allowed investors to exchange securities and non-like-kind property. Then in 1924 Congress eliminated the provision because there was supposedly abuse of the program.
Then with other amendments in 1934 and 1954. They were able to lay the groundwork for the tax law as we know it today. Which is good that they were finally able to get it figured out.
In1986, the Tax Reform Act eliminated the capital gain treatment, accelerated depreciation methods, and introduced the passive loss and at-risk rules. Then with the Tax Cut Job Act then temporarily limited the like-kind exchange rules for real property from 2018 through 2025.
A Like-Kind exchange allows the taxpayer significant and valuable benefits. Such as freeing up money to upgrade to better replacement property. Also gives the taxpayer a postponement of income recognition for tax purposes, and the possibility of a stepped-up estate basis.