1031 Real Estate Exchanges Survive in the New Tax Bill

Real Estate Exchanges Tax Bill

Since its inception, we’ve been monitoring the new tax bill (The Tax Cuts and Jobs Act) and its potential impact on section 1031 of the Internal Revenue Code. Now that the bill has passed and been signed into law (and officially took effect January 1, 2018), we’d like to offer a brief summation of its effects. In this article, we’ll provide an update on 1031 exchanges now that the new tax bill has been signed into law.

1031 Exchanges & the Qualified Intermediary

The biggest takeaway is that the new bill has preserved the 1031 exchange of real property and the role of the qualified intermediary in facilitating like-kind exchanges.

This bill is the first major tax code overhaul since 1986. It reduces many tax rates and redefines many rules and accounting methods. Thankfully, the bill keeps the 1031 exchange provision for real property.

However, not all 1031 exchanges were preserved with the passage of this bill. The legislation eliminates 1031 exchanges of personal property (aircraft, artwork, gold coins, and the like). This poses many questions for personal property investors who may currently be in the process of conducting a personal property exchange of like-kind property. It’s a good idea to contact your 1031 exchange professional to answer any of your questions about your exchange.

Qualified Intermediaries in Minneapolis

A qualified intermediary is perhaps the most important person you can have on your 1031 exchange team. Hiring an intermediary will ensure that you are insulated from receiving any taxable proceeds during your exchange. Furthermore, your intermediary will act as your advisor throughout the exchange – answering your questions, preparing your documents for closing, and more. At Commercial Partners Exchange Company, we have decades of experience acting as qualified intermediaries for clients in Minnesota and throughout the country. Contact us today to speak with a QI about your like-kind exchange!

  • 1031 Hotline: If you have questions about 1031 exchanges and the new tax bill, feel free to call me at 612-643-1031.

Defer the tax. Maximize your gain.


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