As of January 1, 2018, exchanges of personal or intangible property such as vehicles, artwork, collectibles, patents, and other intellectual property generally do not qualify for nonrecognition of gain as like-kind exchanges.

What is not eligible for 1031?

Under IRC §1031, the following properties do not qualify for tax-deferred exchange treatment: Stock in trade or other property held primarily for sale (i.e. property held by a developer, “flipper” or other dealer) Foreign real property for U.S. real property. Goodwill of one business for goodwill of another business.

What are the requirements for like-kind exchange treatment for real property?

How a Like-Kind Exchange Works

  • The asset being sold must be an investment property and cannot be a personal residence.
  • The asset being purchased with the proceeds must be similar to the asset being sold.

Can you 1031 car?

When you’re looking at the rules in 1031, the only thing that changes when we apply 1031 to a car, for example, compared to a real property, is the like-kind definition changes. When we’re talking about a car, it’s got to match up with another car.

How long do you have to complete a 1031 exchange?

180 days
To receive the full benefit of a 1031 exchange, your replacement property should be of equal or greater value. You must identify a replacement property for the assets sold within 45 days and then conclude the exchange within 180 days.

Which states do not recognize 1031 exchanges?

There are also states that have withholding requirements if the seller of a piece of property in these states is a non-resident of any of the following states: California, Colorado, Hawaii, Georgia, Maryland, New Jersey, Mississippi, New York, North Carolina, Oregon, West Virginia, Maine, South Carolina, Rhode Island.

What are the requirements of a 1031 exchange?

Requirements for a 1031 Exchange. Timelines for a 1031 ExchangeThe investor (or exchanger) must follow the strict 45- / 180-day guidelines for an exchange. Once the exchanger sells his/her property (relinquished property) he/she has 45 days to identify property(s) of equal or greater value.

What are the rules of a 1031 exchange?

One key requirement of the 1031 exchange rules is that both the purchase price must be equal to or greater that of the original property. For example, if you are selling a property for $2 million, you need to buy a property for $2 million or more to fully defer your capital gains taxes.

What are the tax benefits of 1031 exchange?

The Advantages of 1031 Tax-Deferred Exchanges LEVERAGE. Investors can take advantage of the 1031 tax-deferred exchange to acquire a more valuable investment property. CONSOLIDATION/DIVERSIFICATION. MANAGEMENT RELIEF. INCREASED CASH FLOW/INCOME. INCREASED PURCHASING POWER.

Why do I need a 1031 exchange?

1031 exchanges are very popular for investors who want to upgrade to a larger investment property without taking a tax hit when selling their smaller property. It is also a popular strategy if an investor wants to sell a property located in one market and buy a property located elsewhere.