Does My Property Qualify For A 1031 Exchange?

For many investors, a 1031 exchange involves nothing more than exchanging one parcel of real property they own for another “like-kind” property. A simple exchange of this type has allowed thousands of non-professional investors to reap the benefits offered by a 1031 exchange.

However, IRS code allows for many other real estate interests to qualify for tax-deferral under section 1031. Both Congress and the IRS have deemed all of the following types of real estate interests to qualify as “like-kind” (to each other) for a valid 1031 exchange.

• Fractional interest (Tenancy-In-Common)
• Leasehold interests (30-year plus lease)
• Fee interest
• Easements (for conservation or right-of-way)
• Water rights
• Oil & Gas interests
• Mineral rights
• Transferrable development rights

It is important to understand the breadth of interests available that qualify for 1031 exchanges. This allows a savvy investor to explore beyond simple real estate ownership and maximize the tax-deferral benefits currently available on a variety of other real estate ownership interests.

To learn more about 1031 exchanges or our qualified intermediary and replacement property locator services, please visit our website.