1031 Exchanges of Railroad Cars

1031 Exchange Railroad Cars

Personal property can be exchanged in a 1031 and one item of personal property that's very interesting is railroad cars.

Railroad Car 1031 Exchange

Railroad cars have a maker’s life of about 50 years but they can be depreciated at a much more rapid pace.

So if you are in the railroad car business and you're selling off some old steel railroad cars that have nice residual value but have a very low basis, and you're going to acquire brand new aluminum railroad cars, the disposition of the old cars can be structured as a 1031 exchange so you don’t recognize any gains on those sales.

Like-Kind Railroad Cars

Now what is like-kind for railroad cars? Heavy duty railroad cars are going to be like-kind to other types of railroad cars. They are not like-kind to other types of personal property like a truck or construction equipment. Railroad cars are like-kind to railroad cars and other locomotives. 

  • 1031 Hotline: If you have questions about 1031 exchanges of trains or railroad cars, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.


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