Which of the following would not qualify for like-kind exchange treatment?

In the context of like-kind exchanges, the correct answer highlights an important rule that governs the tax treatment of property exchanges. Like-kind exchange treatment, as established under Internal Revenue Code Section 1031, allows for the deferral of capital gains taxes when certain types of properties are exchanged for one another. However, one of the key stipulations is that the properties involved must be of the same nature or character.

The scenario involving real property located in the U.S. being exchanged for non-U.S. property does not qualify for like-kind exchange treatment because the properties are not of the same type – one is domestic real estate and the other is foreign real estate. This fundamental distinction excludes the transaction from the provisions that enable tax deferral under like-kind exchange rules.

On the other hand, transactions involving U.S. real property exchanged for other U.S. properties, such as land for investment land or real property for other U.S. real property, meet the like-kind exchange criteria because they remain within the category of real property. Thus, these exchanges preserve the investment nature and characteristics required for qualification under the code.