1031 exchanges apply to various items of real property in addition to real estate. One item of personal property that can be exchanged in a 1031 transaction is aircraft.
Our Duluth 1031 exchange facilitators are ready to walk you through the process of exchanging your aircraft and deferring your taxable gain. Contact us today to learn more about your options for deferring your taxes on the sale of an aircraft – 218.831.1031.
What is an Aircraft Exchange?
If you have an aircraft that you use primarily for business or investment purposes, you can sell your aircraft and defer the capital gains taxes by reinvesting those sales proceeds into a bigger, better aircraft. Typically, when you sell a piece of personal property like an airplane, you have to recognize and pay a hefty tax on the capital gains from the sale. With a 1031 exchange, you can avoid this tax hit by rolling your cash proceeds from the sale into another aircraft to continue your investment.
1031 exchanges exist to incentivize investors to continue investing their capital. This benefits the investor by allowing them to avoid a tax bill, and it benefits the economy by keeping capital moving and stimulating growth.
Aircraft Exchange Requirements
In any 1031 exchange, there are various requirements and deadlines that you have to hit in order to complete a successful exchange. First, there is a time deadline. You have 180 days after the close of your initial sale to complete your exchange. Furthermore, the first 45 days of that are designated as your time to identify new replacement property.
Another important requirement is that you have to exchange into property that is like-kind to your relinquished property. When it comes to aircraft, that means you need to purchase new property that is designated in the same general asset class 00.21. So an airplane can be exchanged for another airplane, but not for an apartment building.
Duluth Airplane 1031 Exchange Services
If you have an aircraft that you are considering exchanging in a 1031 transaction, contact our Duluth qualified intermediaries today to discuss your options. Our 1031 professionals have been helping taxpayers in the Duluth area for decades. Call today to start your exchange – 218.831.1031.