What property can be exchanged?
Exchanges can be performed with property that is considered “like-kind” to other properties. Both the relinquished (sale) property and the replacement (purchased) property must meet certain requirements. Those include:
- Both properties must be held for use in a trade or business OR for investment.
- Like-kind property is property of the same nature, character or class regardless of quality.
Eligible property may include:
- Vacant or Farm Land
- Commercial, Industrial or Retail real estate
- 30 Year Leasehold or Tenants In Common Interest
- Delaware Statutory Trust (DST)
Items that DO NOT qualify for 1031 Tax Deferred status
- Property used primarily for personal use, such as a primary residence or a second/vacation home.
- Property within the United States cannot be exchanged with property outside of the United States.
- Improvements that are conveyed without land
- Personal property such as Stocks, Bonds or Securities