Internal Revenue Code Section 1031 states that "no gain or loss shall be recognized on the exchange of property held for productive use in a trade or business or for investment if such property is exchanged solely for property of like kind which is to be held for productive use in a trade or business or for investment."

The documents commonly used in a LKE are: (1) Exchange Agreement; (2) Identification of Replacement Property; (3) Assignment of Relinquished Property Contract; (4) Notice of Assignment of Relinquished Property Contract; (5) Assignment of Replacement Property Contract; (6) A Notice of Assignment of Replacement Property Contract.