What Property Does Not Qualify for a 1031 Exchange?

Yesterday, I discussed what property qualified for a 1031 exchange. While the definition is fairly broad, there are some items of property that seem to meet the general criteria – held for business or investment purposes – but still do not qualify.

This includes stocks, bonds, notes, securities and interests in partnerships. Other property that is “held primarily for sale,” such as business inventory, is also excluded from qualification. This further extends to things like real estate bought with the intent to flip or vacant land that will be developed with a house.

Which brings up one last important point. A primary residence usually does not qualify for an exchange, since it is not held for business or investment purposes. However, if a portion of your home is used in trade or business, then that portion may qualify.

To find out how we can help you find and close on your next #1031 exchange property or to learn more about the exchange process and our qualified intermediary services, please visit our website.