A 1031 exchange allows commercial property owners to defer federal and state capital gains and recaptured depreciation triggered on the sale of their holdings given real property of equal or greater value is acquired within 180 calendar days of the closing. 1031 exchange for commercial properties allows investors in real estate to diversify their holdings should they decide to do so while reinvesting in property types ranging from residential properties to oil and gas royalties, Delaware Statutory Trusts and triple net leases.
Commercial properties will have an improved structure to be depreciated and typically include land. Both may appreciate in value, such that at time of sale they will trigger a gain. Both the recaptured depreciation and gain result in a tax that can be deferred in a 1031 commercial property exchange.
As with all 1031 exchanges, consideration must be given to the nature and character of conveyed rights of the 1031 exchange properties to determine whether they are essentially alike. This includes the likeness of physical properties, character of title conveyed, rights of the parties and period or duration of interests.
Eligible Commercial Properties
Here are some commercial properties that are eligible for 1031 exchanges:
- Apartments
- Convenience stores and gas stations
- Golf courses and practice ranges
- Hotels and motels
- Marinas
- Nursing homes
- Office Buildings
- Parking garages and lots
- Self storage units
- Shopping centers and strip malls
- Warehouses
If you are considering a 1031 exchange for your commercial property, Atlas 1031 provides the accommodation services compliant with Internal Revenue Code Section 1031. Click below to begin a consultation or call our office at 1 800 227 1031.
