A type of tax credit which allows owners of business or investment-related properties to exchange the property with a different property and not have to pay capital gain taxes. Essentially, the owner of the property exchanges it for another piece of property that is of equal or lesser value and does not have to pay taxes on the transaction, hence the tax-free exchange portion of the name. There are strict requirements that the owner must meet when selecting a replacement property for the transaction. also called like-kind exchange.