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Are Any Properties Excluded From a 1031 Exchange?

Posted by Chris Peterson | Apr 24, 2022 | 0 Comments

The 1031 Exchange is a powerful tool for investors, but there are some types of property that are not eligible for exchange. The following post explains which assets do, and do not qualify.

What Is a 1031 Exchange?

A 1031 Exchange is a transaction that allows an investor to defer paying capital gains taxes on the sale of an investment property by reinvesting the proceeds from the sale into a similar property.

To be eligible for a 1031 Exchange, the property must be held for investment or used in a trade or business. Property held primarily for personal use, such as a primary residence or vacation home, does not qualify.

Additional Assets That are Not Eligible For a 1031 Exchange

Under current IRS rules and regulations, the following types of property are also not eligible for a 1031 exchange:

- Personal property, such as cars, boats, furniture, or artwork

- Stocks, bonds, or other securities

- Partnership interests

- Interests in S corporations

- Collectibles, such as coins or stamps

If you are thinking about selling an investment property, it's important to consult with a qualified intermediary to determine if a 1031 Exchange is right for you and if the property you currently own and the one you are thinking about purchasing qualifies for a 1031 Exchange.

We are here to guide you through this process and answer any questions that you may have. Contact us at 888-508-1901 to schedule a complimentary consultation. Our team is able to work with clients anywhere in the United States and we'd be happy to sort through your options that pertain to a 1031 Exchange.

About the Author

Chris Peterson

Chris Peterson is the owner of Peterson Law Group. He practices primarily in the areas of wills, trusts and estate planning; probate and trust administration; elder law; and business law. Chris is also the owner of Brazos 1031 Exchange Company.

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