There are many questions surrounding the rules and regulations that govern 1031 exchanges of investment real estate. Some of the most common questions we get are about location. In this article, we are going to talk about some location considerations when it comes to 1031 exchanges of real estate.
Property Within the United States
A 1031 exchange can only be done between property located in the United States. That means both your relinquished property and your replacement property need to be US property. Foreign property does not qualify for 1031 exchange treatment. Keep in mind that your property also needs to be held for a qualified purposes (i.e. investment or business use) and not personal property.
Exchanges Between States
Another common question we get is whether or not you can exchange property between different states. In short, yes. You can exchange a relinquished property in one state for a replacement property in another state. You could sell an duplex in Minnesota and exchange into a retail space in Florida. Exchanging between different states is a very common practice. It can be especially beneficial when taxpayers wish to move their investment into a more tax-advantaged state. Whatever the reasoning, it is perfectly acceptable to 1031 exchange property from one state to another.
Minnesota Qualified Intermediary Services
At CPEC1031, LLC we provide 1031 exchange services to taxpayers looking to sell qualifying real property and defer their taxes. We have been working in the 1031 exchange industry for more than two decades. Contact our team today to learn more about our wide array of 1031 exchange services and find out how we can help you defer your capital gains taxes. Our office is located in Minneapolis. We provide 1031 exchange services to clients throughout the state of Minnesota and across the United States.
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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