Welcome To The Texas 1031 Exchange Co.

Cactus, Cows and Porsches

What do these three unique properties have in common?  Well, prior to the “Tax Cuts and Jobs Act”,  under certain circumstances,  they all qualified under a IRC Section 1031 exchange.   Today, only the “Cactus” is exchangeable as part of a Real Property 1031 exchange.

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, interest in a DST or TIC, and even 30-year leases. Real property has the advantage of having a broad like-kind definition.

Personal Property exchanges are no longer allowed under the changes made by the recent “Tax Cuts and Jobs Act” but are basically replaced by the immediate expensing  provisions of the same act.  Seek the advice of your tax accountant or tax attorney to determine your options.

Gain from depreciation recapture may be postponed. An exchange could be of particular value for real property with older improvements.

Other examples:
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.
Royalty and Working Interest in proven oil and gas properties..