In 1990, the IRS announced the rules on Deferred Exchanges. Section 1.1031 of the Internal Revenue Code delineated the procedure for turning a sale and purchase type transaction into an exchange. These new rules allowed owners of certain types of like / kind Real and Personal property to sell their property and buy other like / kind property without paying the U.S. Capital Gains Tax. The like / kind provision for Real property is broad, and includes Land, Rental, and Business property, any of which, can be exchanged for the other The like / kind provision for Personal property is more restrictive. This type of property must be in productive use in a business (depreciable property), and can only be exchanged for the same type of property. The rule also requires that the "Exchanger" use a "Qualified Intermediary" to hold the proceeds while the exchange is in progress.