As we’ve discussed before, the Tax Cuts & Jobs Act effectively removed items of personal property from 1031 exchange treatment. But there are still some cases in which a personal property exchange can be used at the state level. In this article, we are going to explain how the personal property exchange can still be a viable option for people in certain states.
Personal Property Under Section 1031
Personal property exchanges were really hot before the Tax Cuts & Jobs Act was written into law. But people are still able to do personal property exchanges in some fashion.
For federal tax purposes, personal property is no longer eligible under section 1031. That said, some states have decoupled from certain aspects of federal tax law and there are some states that would technically still allow personal property exchanges for state tax deferral purposes. When you think about it, even the ability to defer your state taxes can be significant, especially in high tax states like Minnesota and California. This is true if you’re buying and selling an individual piece of personal property – say an aircraft – but it’s even more meaningful if you’re an owner of a fleet of aircraft.
Like-Kind Exchange Intermediaries
1031 exchanges are the best way to defer capital gains taxes on the sale of your investment or business real estate. Give our team of 1031 exchange professionals a call today to learn more about the process and how we can help. Our home base is in downtown Minneapolis but we have satellite offices around the United States. No matter where your property is located, we can help you through the details of your 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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