1031 into storage unit

Tax, SDIRAs & Cost Segregation
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1031 into storage unit

Aaron W.
Rental Property Investor · Northern Virginia · Member since 2019 · 793 posts · 620 votes

Have a rental property and want to do a 1031 exchange. Can I do 1031 from a single family rental property into self-storage property?

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Michael Skoczylas
Attorney · Southfield, MI · Member since 2016 · 102 posts · 83 votes
6y

You most certainly can! The like kind requirement is one of the few areas that the IRS is very liberal. If both properties are in the US and considered real property (SFH and Storage both would be) then they are like kind to each other. It seems like they woul both be considered investment properties, so this would qualify.

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  • Adam Rasmussen
    Accountant · Vancouver, WA · Member since 2019 · 100 posts · 71 votes
    6y
    Originally posted by @Aaron W.:

    Have a rental property and want to do a 1031 exchange. Can I do 1031 from a single family rental property into self-storage property?

    It does not sound like it would qualify. The two properties are not "like-kind." You are selling a residential piece of property for a commercial property. Needs to be residential for residential or commercial for commercial. 

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  • Ashish AcharyaBusiness Member
    CPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
    6y
    Originally posted by @Aaron W.:

    Have a rental property and want to do a 1031 exchange. Can I do 1031 from a single family rental property into self-storage property?

    Yes you can. You can do investment properties to business properties or vice-versa.  Investment to investment and business to business property is always permissible. 

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  • Michael Skoczylas
    Attorney · Southfield, MI · Member since 2016 · 102 posts · 83 votes
    6y

    You most certainly can! The like kind requirement is one of the few areas that the IRS is very liberal. If both properties are in the US and considered real property (SFH and Storage both would be) then they are like kind to each other. It seems like they woul both be considered investment properties, so this would qualify.

    3Reply
  • Kyle Fitzpatrick
    Flipper/Rehabber · Bloomington, IL · Member since 2018 · 26 posts · 2 votes
    6y

    Any update on this? Also what about 1031 from residential into land?

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  • Lauren SpeidelPro Member
    Qualified Intermediary for 1031 Exchanges · Chicago, IL · Member since 2017 · 164 posts · 119 votes
    6y

    @Kyle Fitzpatrick Yes, like-kind is very generic. As long as you have had the intent to hold both the relinquished and replacement property for rental income, appreciation, or use in a trade or business, it qualifies for Exchange treatment.

    You can sell a residential property (as long as it has been used for rental income) and buy land (used for appreciation). It should qualify.

    Let me know if you have more questions!

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