2018 has brought changes to the 1031 exchange industry – with the implementation of the Tax Cuts & Jobs Act in January. In this article, we are going to talk about what exactly “like-kind” means in 2018.
“Like-Kind” is one of the most important terms in a 1031 exchange. All property involved in a given 1031 exchange has to be like-kind. In other words, your relinquished property and your replacement property both need to be similar in disposition to one another. Thankfully, the definition of like-kind real estate is very broad – with most real property considered like-kind to most other real property.
The biggest change to “like-kind” in 2018 is in the realm of personal property. Historically, the definition of like-kind personal property has been much more strict than that of real property. However, the Tax Cuts & Jobs Act effectively axed personal property from 1031 treatment. As a result, personal property is not eligible for 1031 treatment and no personal property is considered “like-kind” for 1031 purposes.
Tax Deferral with Section 1031
Looking to sell real estate but don’t want to shoulder the burden of the associated capital gains taxes? A 1031 exchange of real property can help you achieve these goals of tax deferral. When you’re embarking on a 1031 exchange, make sure you work with a qualified intermediary with experience. At Commercial Partners Exchange Company, we have over twenty years of experience facilitating all types of like-kind exchanges. We bring that experience to every transaction we facilitate so you can feel comfortable that you are in good hands. Contact us today at our Minneapolis office to speak with an intermediary about your transaction.
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.
© 2018 Copyright Jeffrey R. Peterson All Rights Reserved