Commercial property is eligible for 1031 exchange treatment, exchangeable for nearly any type of real property. As with all real property, consideration must be given to the nature and character of conveyed rights of the exchange properties to determine whether they are essentially alike. Comparison of the likeness of physical properties, character of title conveyed, rights of the parties and period or duration of interests are to be considered.
Commercial properties will have an improved structure to be depreciated and typically land. Both may appreciate in value, such that at time of sale will trigger a gain. Both the recaptured depreciation and gain result in a tax that can be deferred in a 1031 exchange.
The use of a Certified Exchange Specialist® is an important step towards a successful exchange. The designation affirms the experience level and expertise to accommodate the exchange. The Certified Exchange Specialist on staff at Atlas 1031 Exchange has been accommodating exchanges for professional advisor's and their clients since 2003.
Commercial properties eligible for 1031 exchanges include:
- 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.
When considering selling any of the above, early in the process, include a consultation with a Certified Exchange Specialist®. If new to the 1031 exchange strategy, call us to discuss your questions.