As a leading provider of 1031 exchange services, we are often asked about the types of property that are eligible for a 1031 exchange. The answer is that any real property held for investment or used in a trade or business can qualify for a 1031 exchange.
Types of Eligible Properties
The first thing to understand about eligible properties for a 1031 exchange is that they must be held for investment or used in a trade or business. Primary residences and second homes that are not held for investment purposes do not qualify for a 1031 exchange.
That being said, eligible properties include:
- Rental Properties: Any property that is held for rental purposes can qualify for a 1031 exchange. This includes single-family homes, multi-family homes, apartments, and commercial properties.
- Business Properties: Properties used in a trade or business can also qualify for a 1031 exchange. This includes office buildings, retail spaces, and warehouses.
- Raw Land: Vacant land that is held for investment purposes can be exchanged for another piece of like-kind property. However, land held for personal use, such as a vacation property, does not qualify.
- Personal Property: Some types of personal property used in a trade or business can also qualify for a 1031 exchange. This includes equipment, machinery, and vehicles.
It’s important to note that the properties being exchanged must be “like-kind,” which means they are of the same nature or character. For example, a rental home can be exchanged for a commercial building, but not for a piece of artwork or a boat.
At 1031 Exchange Place, we understand the complexities of the 1031 exchange process and can help guide you through every step of the way. Our team of experts can answer any questions you may have about eligible properties and provide the necessary resources to ensure a successful exchange.