Many taxpayers are entrepreneurial. They might be in one business segment and want to 1031 exchange into a new business segment. For example, a restaurant owner might want to sell their restaurant and buy a hotel. How can this be an exchange? Isn’t a restaurant fundamentally different than a hotel?
Real Estate
In the realm of 1031 exchange, pretty much all real estate is considered like-kind. So if we’re dealing with only the real estate, it’s really easy to do an exchange from a restaurant building to a hotel building. As long as they’re both in the US and used for investment or business purposes, they’re like-kind.
Other Elements or Components
Other types of assets (other than real property) that may be involved in the sale, like the restaurant equipment or hotel furnishings – those types of property are not eligible for 1031 exchange treatment and should be left out of the 1031 transaction.
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
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