What is Eligible for a 1031 Exchange?

 1031 Exchange Candidate

The IRS has set in place various rules that determine what is and is not eligible for 1031 exchange treatment. In this article, we are going to talk about a few types of property that are eligible for 1031 exchange, and a few types that are not eligible.

Real Property

Real estate is the most common type of property exchanged in a 1031. Apartment buildings, hotels, office buildings, and the like can all be exchanged with a 1031 transaction. But remember that in order to be eligible for a 1031 exchange, property must be held primarily for investment or business purposes.

Personal Property

Items of personal property can also be exchanged under section 1031. Aircraft, artwork, coins, precious metals, business equipment, and the like can all benefit from 1031 treatment. The most important thing to keep in mind with personal property is that the like-kind requirement is much stricter than in the realm of real estate.

What is NOT Eligible?

There are also certain types of property that are not eligible for 1031 exchange at all. First off, any property that is held primarily for your own personal use (like your primary residence, or your personal car) is automatically excluded.

1031 Exchange Company in Minneapolis, MN

If you’re thinking about deferring your taxes with a 1031 exchange, contact a qualified intermediary before doing anything else. When you hire a qualified intermediary for your 1031 exchange, you have a personal advisor who can answer all of your 1031 exchange questions, prepare the necessary documents for your exchange, and ensure that you are able to defer your gain on the sale of your real property. Contact one of the qualified intermediaries at Commercial Partners Exchange Company today to get your exchange of like-kind property off the ground. Our team of intermediaries has decades of experience aiding taxpayers and investors across the country with their like-kind exchanges.

  • 1031 Hotline: 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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