The replacement propery in a 1031 exchange that is similar in classification or characteristics to the relinquished property. Like kind property cannot be a primary residence or a second home and must be for business or investment purposes.
The properties involved in an exchange must be similar in nature or characteristics, that is both the property sold and the property being acquired must be used for investment or business / rental purposes.
Refers to the nature of the property the Exchanger gives up or receives in the exchange, such as real property for real property. It does not have to be similar in use such as raw land for raw land. The land could be exchanged for any other real property that will be used in a trade of business or held for investment.