1031 exchange question

Rental Property Investor · Glastonbury, CT · Member since 2016 · 13 posts · 0 votes

Hello all,

I have a large sum of money invested in a handful of Paintings. Is there a way that i could 1031 exchange my sale from my painting right into a property?? Seems like you should be able too but i haven't been able to find any information on it. If any one has any insight it would be greatly appreciated!

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Kyle Kadish

Financial Advisor · Manchester, NH · Member since 2017 · 97 posts · 68 votes

@Nathan Hood prior to changes in the Tax Cut and Jobs Act, taxpayers were able to exchange any like-kind [personal or rea]l property for like-kind (artwork for artwork). Now, the 1031 provisions are exclusive to real property (i.e. real estate).

Depending on the value, you might wish to explore the Deferred Sales Trust strategy which allows for the deferral of gains taxes, while using the proceeds in any manner you wish.

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Stephanie Fleming
Member since 2018 · 37 posts · 22 votes
6y
Hello,
From my understanding you use a 1031 exchange you have to buy and sell like minded items. Property for property etc. Consult your provider.
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Kyle Kadish
Financial Advisor · Manchester, NH · Member since 2017 · 97 posts · 68 votes
6y
@Nathan Hood prior to changes in the Tax Cut and Jobs Act, taxpayers were able to exchange any like-kind [personal or rea]l property for like-kind (artwork for artwork). Now, the 1031 provisions are exclusive to real property (i.e. real estate).
Depending on the value, you might wish to explore the Deferred Sales Trust strategy which allows for the deferral of gains taxes, while using the proceeds in any manner you wish.
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Lien VuongBusiness Member
Real Estate Agent · Boston, MA · Member since 2018 · 2k+ posts · 1k+ votes
6y
For something like that it would be better to look into an Opportunity Zone to eliminate your tax gains altogether. I do not believe you can do it for real estate for 1031 Exchange.
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Brandon B.
Specialist · San Diego · Member since 2019 · 16 posts · 20 votes
6y
@Nathan Hood
Hey Nathan,
1031 exchanges only cover “like kind” real estate transactions.
If the goal is to sell and not pay taxes, while owning real eatate - opportunity zone investing is your best option.
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Thomas RutkowskiPro Member
Financial Advisor · Boynton Beach, FL · Member since 2015 · 834 posts · 798 votes
6y
@Kyle Kadish
With a Deferred Sales Trust, the sales proceeds are held in the Deferred Sales Trust. The seller will only have limited ability to direct the investments of the Trust and they certainly cannot be used in any manner they wish. A Monetized Installment Sale, on the other hand, works as you described. It will provide the seller with funds that may be invested in any manner they wish.
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