Nancy Hughes

It’s not just about tax deferral! Most people don’t realize how many benefits there can be to a 1031 Exchange, and it really varies depending on your needs and situation. Do you want to diversify your investment properties, or consolidate them? Do you need cashflow from income producing property, or would you rather reduce management hassles by exchanging into vacant land? Perhaps you need commercial space to run your business, or would rather own rental properties closer to home. Call me at (307) 231-2542 to learn how a 1031 Exchange could work for you. 

You can buy Replacement Property in any of the 50 states and the District of Columbia, and in certain circumstances you can exchange into investment property in the U.S. Virgin Islands, Guam, and the Northern Mariana Islands. Property in Puerto Rico and American Samoa are not eligible for a 1031 Exchange. In addition, US taxpayers selling a foreign property (such as rental real estate in Vancouver, Canada) and buying other foreign property (commercial property in Toronto) can utilize a 1031 Exchange, as foreign property is considered like kind to other foreign property.

To defer all of your capital gains taxes, you need to buy Replacement Property for equal or greater value. This means if you are selling investment property for $1 million, you need to buy Replacement Property (or properties) for $1 million or greater. Factors such as your gain, profit, net proceeds, or mortgage payoff amount are not considered when determining the reinvestment amount. You can also do a “partial exchange,” where you buy Replacement Property for lesser value, as long as you buy above the adjusted basis of your Relinquished Property. You will pay capital gains tax on any exchange proceeds you don’t reinvest and take out as “boot,” but this can be a great solution if you need cash for some other purpose, but still want to defer a significant amount of your capital gains.

No, there are no restrictive rules for 1031 for Wyoming.