I have never encountered this situation. That being said, I believe this would be no problem if the Canadian citizen is not trying to exchange a foreign property for property in the US. IRS does not consider foreign property to be a "like kind" property as one in the US. The foreign investor will need to apply for a witholding certificate so that they can avoid paying the witholding taxes to IRS. Obviously you should speak with a CPA that is knowledgable with 1031 exchanges to accomplish this goal.

What I actually meant was if I'm a Canadian citizen without American citizenship and purchase a commercial property in the US, sell it, then purchase another property in the US under the 1031 exchange. Could this be done without American citizenship?

Seems like I wasn't clear enough in my original explanation... :oops:

YES, THIS CAN BE DONE :lol:

Awesome, thank you!

Yes, as long as there is a U.S. Income Tax consequence, any foreign person or entity can complete a 1031 exchange out of and into U.S. investment property.

Likewise, any U.S. taxpayer that owns foreign investment property can complete a 1031 exchange by 1031 exchanging out of and into foreign (non-domestic) property.

Nice job! It's really nice link that you have shared with us.
Thanks!

The answer is yes, a Canadian citizen can purchase commercial property in the United States and initiate a 1031 exchange to defer the taxable gain. The Foreign Investment in Real Property Act of 1980 (FIRPTA) must be followed when selling.