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Real property owned by an entity for other than its own use is an investment property. In other words, investment property is real estate held for portfolio purposes. Significant features of the US tax code make investment property a tax advantaged asset class. Most notably, under the IRS section 1031 exchange provisions, the taxable gain on the sale of investment property can be deferred indefinitely by exchanging the investment property for another "like kind" property, where "like kind" has gradually become loosely interpreted as meaning any other investment property (or group of properties) of equal or greater value. An investment property does not have to be held for profit. In New York City, some major landlords lease entire office buildings to non-profit organization tenants for tax purposes. An individual's home is not classified as an investment property, but homeowners nevertheless commonly speak of their home as an investment. Similarly, an industrial concern's wholly owned operating site is a user property, rather than an investment property.
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