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• First of all, let's address the question, what exactly is meant by a "dealer"?
  
  
• A "dealer" is a person, corporation, or entity that acquires property for a fast resale only. They are similar to "used car dealers" who buy cars to quickly repair, clean and polish them for resale. Congress limited exchanges to those properties "held for productive use in a trade or business or for investment". The IRS interpreted those words to exclude properties "held primarily for sale". Therefore, if a dealer or anyone else tries to exchange property held primarily for sale, they cannot exchange.
  
  
• However, if a dealer decides to rent the property or to hold onto the property long enough to be considered investment property, then the property can be exchanged. Read my book for more details.

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