1031 exchanges of personal property are handled a little bit differently than exchanges of real estate. With personal property exchanges, it’s important to involve a 1031 qualified intermediary early in the process to avoid any potential roadblocks. Our Duluth 1031 intermediaries have decades of experience helping taxpayers facilitate personal property exchanges. Contact us today to start your exchange – 218.831.1031.
What is a Personal Property Exchange?
As opposed to real estate which is affixed to the land (or the land itself), personal property is any type of property that is moveable. This includes a wide variety of items. Some of the most common types of personal property that people exchange under section 1031 include:
- Business & Construction Equipment
- Airplanes & Other Aircraft
- Cars & Trucks
- Coins & Precious Metals
Similar to real estate exchanges, in a personal property exchange, your relinquished property must have been held for investment or business purposes. You can’t do a 1031 exchange on your personal car that you use to drive your kids around. But if you own and operate a fleet of vehicles for your business, those can be 1031 exchanged.
Personal Property Like-Kind Requirement
The most important thing to be aware of with exchanges of personal property is that the like-kind requirement is much stricter than it is in the realm of real estate. Generally, you can exchange any real estate in the US for any other real estate in the US (assuming you meet the other criteria for a 1031 exchange). However, you can’t exchange any personal property for any other personal property. The relinquished and replacement properties both have to be in the same general asset class. So fleet of trucks can be exchanged for other like-kind trucks, but not for aircraft.
Exchange Your Personal Property in Duluth
If you are interested in exchanging chattel under section 1031, give us a call today and talk to one of our Duluth qualified intermediaries. We can explain the 1031 process, prepare the necessary documents, and work with you to ensure a successful 1031 exchange – 218.831.1031.