Talk to an Advisor

Which Real Estate Is Not Eligible For Section 1031?

It’s important to understand what types of real estate are not eligible for this tax-deferred investment strategy. While Section 1031 of the Internal Revenue Code allows for the exchange of certain types of investment or business properties, there are some restrictions that you need to be aware of.

One type of property that is not eligible for a 1031 exchange is your primary residence or vacation home. These types of properties are considered personal use properties and are not eligible for the tax benefits of a 1031 exchange.

Additionally, any real estate that is held primarily for resale, such as a fix-and-flip property, is not eligible for a 1031 exchange. This is because these types of properties are considered inventory and not held for investment or productive use.

Finally, any property that is used for personal purposes or held for personal use, such as a personal-use farm or artwork, is not eligible for a 1031 exchange.

Also remember that the rules and regulations surrounding Section 1031 exchanges can be complex, so it’s important to work with a qualified intermediary or tax professional to ensure that you are making the best decisions for your investment strategy. At 1031 Exchange Place, we are committed to providing expert guidance and support to help you navigate the complexities of 1031 exchanges and make informed decisions about your real estate investments.