Welcome To The Texas 1031 Exchange Co.
Cactus, Cows and Porsches
What do these three unique properties have in common? Their sale may all qualify for IRS Section 1031 Exchange treatment. Assuming that the cactus is firmly planted in real estate, of course.
While many taxpayers are familiar with 1031 exchanges, most think of real estate transactions first. Real property exchanges include ranch and farm land, rent houses, office buildings, residential and commercial lots, conservation easements, water rights, right-of-ways, mineral rights, and even 30 year leases. Real property has the advantage of having a broad like-kind definition.
Less mainstream are personal property exchanges which include equipment of all types, breeding livestock and wildlife, and precious metals and coins. Investments in collector automobiles and rare art can qualify for 1031 treatment under certain conditions. These properties have relatively narrow like-kind definitions.
Gain from depreciation recapture may be postponed. An exchange could be of particular value for real property with older improvements and equipment with little or no book value but high resale value.
Duplex – even if the taxpayer lives in one side, the other leased side can be exchanged.
Home with business office – the value of the office may qualify for exchange treatment.
Multi-asset properties – an example would be a hotel, a B&B, or a ranch that has the underlying land and buildings as well as furnishings and equipment.
Royalty and Working Interest in proven oil and gas properties..