Some of the most common questions we hear about 1031 exchanges are those on the topic of geography. Can you exchange out of a property in one state and into a replacement property located in a different state? What about a different country? In this article, we are going to talk about the geographical restrictions of the 1031 exchange and whether or not you can exchange property in different states of countries.
Out of State Exchanges
It is possible to do a 1031 exchange of property across state lines. This sort of thing happens all the time. For example, say you own an apartment building in Woodbury, MN and you want to exchange out of that and into a bigger apartment building in Hudson, WI. This type of exchange would be perfectly legitimate under section 1031 – assuming you satisfy all of the other necessary guidelines.
Other Countries
The 1031 exchange is set out in the Internal Revenue Code and governed by United States law. You can exchange foreign (non US) property for other foreign real property; but you cannot mix US for foreign or foreign for US property.
Real Estate Exchanges Under Section 1031
For twenty years, the qualified intermediaries at CPEC1031 have been helping investors of all sizes defer taxes on the sale of real property using section 1031 of the Internal Revenue Code. Our intermediaries can help you throughout every stage of the like-kind exchange process – preparing your documents, answering your questions, and advising you on the best course of action. Contact us today to speak with a qualified intermediary about your next exchange of real estate. Defer the tax and maximize your gain with a section 1031 exchange!
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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