Personal Property 1031 Exchange

Posted by Andy Gustafson on Thu, Jun 26, 2014

Personal property held in the productive use of a business when sold triggers a federal and state capital gain tax on the appreciation and a twenty five percent depreciation recapture tax that is deferrable in a 1031 exchange. The tax can be sizable given past years of bonus depreciation. If the owner will replace with like-kind or like-class property of equal or greater value than the net sales price, the deferral represents additional working capital or an indefinite interest free loan until the replacement property is sold or another 1031 exchange is initiated.

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Tags: personal property

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