Not all property can be exchanged in a 1031 transaction, and it’s important to know the distinction between acceptable property and excluded property. The recent Tax Cuts & Jobs Act brought additional changes to section 1031 and what property is allowed. In this article, we are going to talk about the property that cannot be exchanged in a 1031 transaction.
Personal Property is Excluded
The Tax Cuts & Jobs Act, which went into effect a couple of years ago, preserved 1031 exchanges of real estate, but got rid of 1031 exchanges of personal property. That means you cannot do a 1031 exchange involving any items of personal property. The following is a list of some personal property items that can no longer be exchanged in a 1031 transaction:
Aircraft
Artwork
Gold Coins
Livestock
Business Equipment
Other Property Benchmarks
There are also other benchmarks you have to satisfy with your 1031 exchange property. The property involved in the exchange needs to be held for use in your trade or business, or for investment purposes. Property that you hold for personal use (such as your primary residence) will not qualify for 1031 treatment.
1031 Exchange Help
If you are searching for help with your 1031 exchange, you’ve come to the right place! The qualified intermediaries at CPEC1031, LLC can help you through every stage of your exchange – from the sale of your relinquished property to the closing of your replacement property. With more than two decades of experience under our belt, we have the skills needed to help you. Contact us today to learn more about the like-kind exchange process and get your exchange up and running! Our primary office is located in downtown Minneapolis, but we work with clients throughout Minnesota and across the country.
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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