1031 Exchange Idiosyncrasies in the State of Pennsylvania

1031 Exchange Pennsylvania

Some states in the union have unique interpretations of section 1031 of the IRC. Pennsylvania is one such state and conducting an exchange there brings a lot of potential challenges. In this article, we are going to talk about 1031 exchanges in the state of Pennsylvania and how state tax law can impact 1031 exchange transaction.

State vs. Federal Tax Law

Section 1031 of the Internal Revenue Code deals with taxation on the federal level, which means taxpayers can do a 1031 exchange regardless of where they live in the United States. However, various states apply their own layer of taxation to 1031 exchange transactions, which can make matters even more complex.

Pennsylvania 1031 Exchanges

Pennsylvania does not recognize the deferral of gains under section 1031 for state tax purposes. That means if you sell a piece of real property in Pennsylvania you have to report all gains and pay the appropriate taxes on your state income tax form. You can, however, still benefit from federal tax deferral with your 1031 exchange.

CPEC 1031 – Commercial Partners Exchange Company

The qualified intermediaries at CPEC 1031 (Commercial Partners Exchange Company) have been facilitating 1031 exchange transactions for more than twenty years. We can help you through every stage of your commercial transaction – from the sale of your relinquished property to the acquisition of your replacement property. Reach out to us today to set up your exchange! You can find us at our main offices in downtown Minneapolis.

  • Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.


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