Like-kind exchanges for the real property
New Regs. Sec. 1.1031(a)-3 provides a unifying definition of the real property for Sec.1031, real property includes “land and improvements to land, unsevered natural products of the land, and water and air space superjacent to land”. And the new Regs provide that each distinct asset must be analyzed separately from any other assets to determine whether it counts as real property.
New Regs. Sec. 1.1031(a)-3(a)(2) defines “improvements to land” as inherently permanent structures and the structural components of inherently permanent structures. If interconnected assets work together to serve an inherently permanent structure, the assets should be analyzed together as one distinct asset.