1031 Exchange and Primary Residence

1031 Exchange and Personal UseReal and personal property held for stricly personal use does not qualify for a 1031 exchange tax deferral of federal and state capital gains and depreciation recapture taxes. However, property, such as a primary residence converted to a rental and held as an investment property for two years, will qualify for a 1031 exchange. Personal property, including collectibles, vintage cars and artwork, qualifies for the tax deferral given the property is “held for productive use in a trade, business or investment” as supported by maintaining detailed ledgers recording sales and acquisitions, invoices, insurance and expense records.

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