There have been a lot of changes to section 1031 over the past year or so. With these changes come a lot of questions. In this article, we will discuss whether co-ops can be exchanged under section 1031 of the Internal Revenue Code.
Tax Law Changes
With the implementation of the Tax Cuts & Jobs Act in 2018, there were a lot of changes to the 1031 exchange landscape. Most notably, 1031 exchanges were narrowed to only real estate – personal property exchanges were excluded from eligibility.
With these changes in mind, do co-ops qualify for 1031 exchange tax treatment?
Co-Ops & 1031 Exchanges
The short answer is yes – co-ops can qualify for 1031 exchange treatment. The IRS has issued a ruling that co-ops are eligible for 1031 exchange because they are to be treated as real estate. This means you can exchange co-op stock in a 1031 transaction, and interest in a co-op can be treated like interest in real property.
Get Help With Your 1031 Exchange
If you’re thinking about deferring taxes with a 1031 exchange, get professional assistance from a qualified intermediary to ensure the success of your exchange. The qualified intermediaries at Commercial Partners Exchange Company have two decades of experience helping clients throughout the country on their real estate exchanges. We work with you from the start of your exchange all the way through to closing. Give us a call today to talk about the details of your real estate exchange. You can find us at our primary office 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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