As you already know, the Tax Cuts and Jobs Act removed personal property from the deferred tax treatment for like-kind exchanges. In most real-estate echanges some amount of personal property is still included. 

Likely, there is a proposed regulation that states that if the personal property was transferred together with the real estate and the aggregate FMV of the personal property is not more than 15% of FMV of the replacement real estate, then the personal property is INCIDENTAL. Read more about the incidental property treatment in Proposed Regulation Section 1.1031(k)-1(g)(7)(iii)

There are three basic rules that must be followed per IRS instructions:

  1. the seller of the property must have the sales proceeds placed into an escrow account by a Qualified Intermediary (for example,  an attorney)
  2. the replacement property or properties must be identified within 45 days –and
  3. the entire transaction must be completed within 180 days.

Example: 

you are exchanging a $100,000 house with $15,000 of depreciable property for a $200,000 house. Since the $15,000 is only 7.5% of the basis of the property that you are exchanging for, the $15,000 is incidental. 

Like-Kind Exchanges can be a complex transaction if you don’t learn it in-detail. 

Normally, usually, if you exchange one property for another and another property has a higher fair market value, you will be subject to income taxes (in addition to other taxes).

Likely, if you look at Section 1031 of the Code, you will see that you can postpone your gain recognition if your transaction is exchanging one property held for productive use for another like-kind property held for productive use. The difference in the fair market value is then preserved in the hands of the taxpayer by adjusting the basis of the property received. 

There are many conditions that would be taken into the calculation of gain recognition, such as additional property and/ or cash received during the exchange.

If you look at https://www.law.cornell.edu/uscode/text/26/1031  you will see that… “No gain or loss shall be recognized on the exchange of real property held for productive use in a trade or business or for investment if such real property is exchanged solely for real property of like kind which is to be held either for productive use in a trade or business or for investment.

Exception for real property held for sale
This subsection shall not apply to any exchange of real property held primarily for sale.

Requirement that property be identified and that exchange be completed not more than 180 days after transfer of exchanged property For purposes of this subsection, any property received by the taxpayer shall be treated as property which is not like-kind property if—

(A)such property is not identified as property to be received in the exchange on or before the day which is 45 days after the date on which the taxpayer transfers the property relinquished in the exchange, or

(B)such property is received after the earlier of—
(i)the day which is 180 days after the date on which the taxpayer transfers the property relinquished in the exchange, or
(ii)the due date (determined with regard to extension) for the transferor’s return of the tax imposed by this chapter for the taxable year in which the transfer of the relinquished property occurs.” 

Reference: https://www.law.cornell.edu/uscode/text/26/1031