Michael submitted a question through the Ask The 1031 Expert feature on the Atlas 1031 web site. The question centered upon whether the sale of rental property owned in Australia could defer capital gains in a 1031 exchange by purchasing replacement property in the United States. The Omnibus Budget Reconciliation Act of 1989 added subsection […]
In a 1031 exchange, foreign real and personal property, when exchanged for foreign real and personal property, qualify for a federal capital gain tax deferral. Real property can be any real property given the nature and character of rights of the exchange properties are essentially alike including likeness of physical properties, character of title conveyed, rights of the parties and duration of interests. Personal property must be exchanged for like-kind or like-class property, such as aircraft for aircraft, gold bullion for gold bullion or oil painting for oil painting. Predominance of use over the prior two years determines the property’s location.