Small Business

Generally, if you exchange business or investment property solely for business or investment property of a like-kind, no gain or loss is recognized under Internal Revenue Code Section 1031.
If, as part of the exchange, you also receive other (not like-kind) property or money, gain is recognized to the extent of the other property and money received, but a loss is not recognized.
Section 1031 does not apply to exchanges of inventory, stocks, bonds, notes, other securities or evidence of indebtedness, or certain other assets.

If you sell a group of assets that make up a trade or business and the buyer's basis in those assets are determined wholly by the amount paid for the assets, both the seller and buyer must allocate the total sales price to the assets transferred.
Form 8594 Asset Acquisition Statement should also be filed with the IRS.

A sale is a transfer of property for money or a mortgage, note, or other promise to pay money.
An exchange is a transfer of property for other property or services.

Business assets are things of value that are used in a business. The assets are of two types:
Tangible assets, Cash and Receivables, Inventory like business vehicles, equipment, supplies, and buildings.
Intangible assets, like goodwill copyrights, patents, and trademarks.

Depreciable assets such as buildings, land, machinery and equipment held more than one year are classified as (IRC) Section 1231 property.
The sale triggers a taxable event (gain or loss) that is reported on IRS Form 4797, Sale of Business Property, Part 1.

Properties are of like-kind, if they are of the same nature or character, even if they differ in grade or quality. Personal properties of a like class are like-kind properties.
However, livestock of different sexes are not like-kind properties.
Also, personal property used predominantly in the United States and personal property used predominantly outside the United States is not like-kind properties.
Real properties generally are of like-kind, regardless of whether the properties are improved or unimproved. However, real property in the United States and real property outside the United States are not like-kind properties.

You may elect to report the sale on IRS Form 6252 which spreads the tax liability on the gain over the life of the installment period.
You may elect not to use the installment method if you want to report the entire profit in the current year of sale.

The long term holding period is more than one year. The short term holding period is one year or less.
The significance of this determination is that gains on long term assets benefit from lower tax rates.

Fair market value (FMV) is the price at which the property would change hands between a buyer and a seller when both have reasonable knowledge of all the necessary facts and neither has to buy or sell.
If parties with adverse interests place a value on property in an arm's-length transaction, that is strong evidence of FMV.
If there is a stated price for services, this price is treated as the FMV unless there is evidence to the contrary.