Does Your Real Estate Property Qualify for a 1031 Exchange?

Written by Posted On Tuesday, 30 April 2019 16:11

A 1031 Exchange is an IRS-authorized process where like-kind business or investment property is exchanged without immediate tax liability to the property owner (Exchangor).

While the 1031 Exchange is most commonly used for real estate transactions, other depreciable assets (office equipment, cars and aircrafts) and non-depreciable assets (some patents, software, and trademarks) may qualify for exchange as well! 

So... What does qualify? Property held for productive use in a trade, business or for investment may be exchanged for like-kind property. For real estate, like-kind property is widely defined as real property located in the United States and some of its territories. A single-family rental can be exchanged for a duplex, raw land for a shopping center, or an office building for apartments. Any combination will work.

Real property and personal property are not like-kind to one another. A commercial building may not be exchanged for an airplane, a single-family rental for a licensed timeshare, or raw land for heavy construction equipment. Personal property is evaluated based upon its nature and character, its General Asset Class, and NAICS classification. A school bus may be exchanged for a metro bus, a barge for a tugboat and a fleet rental car for a taxi.

Watch and Listen as David Moore covers this topic and more in the latest Blogcast update! 



What Property Qualifies for a 1031 Exchange?
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David Moore

David Moore, CEO, founded Equity Advantage with his brother Tom in 1991, after a successful real estate investment career. David is a nationally recognized expert on 1031 exchanges and a former board member of the Federation of Exchange Accommodators. David is a Certified Exchange Specialist (CES).

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