IPX1031 Insight Blog

Exchanges of Foreign Property

Exchangers may freely exchange properties throughout the United States, trading property in one state for replacement property in another state.  However, foreign real property is not like-kind to United States real property, which is limited to the 50 states and the District of Columbia (IRC §1031(h) and §7701(a)(9)).  Temporary Regulations issued in 2005 (T.D. 9194) provide a limited exception to this rule, permitting exchanges, under certain circumstances, of U.S. based property and property located within the U.S. Virgin Islands, Guam and the Northern Mariana Islands. Treas. Reg. §1.932-1(T)(g)(ii)(E) and §1.935-1(T)(c)(ii)(E).  Note that property located in other U.S. Territories, such as Puerto Rico and American Samoa, is not like-kind to property located within the United States.

U.S. taxpayers anticipating a gain on the sale of foreign property and intending to buy other foreign property may benefit by structuring the transaction as an IRC §1031 exchange because foreign property is considered to be like-kind to other foreign property.  For example, Canadian rental real estate in Vancouver may be exchanged for commercial real estate in Toronto.

Locate a 1031 Expert In Your Area

Recent Posts

Tax Straddling – 1031 Exchanges at the End of the Year

updated November 2023 Tax Straddling - Pay Taxes in 2024 or 2025? When a 1031 Exchange is opened in the latter part of the year, a seasonal treat worth mentioning is “tax-straddling.” If that exchange is successfully completed, those taxpayers defer taxes to receive...

1031 Cybercrime

Nationwide, fraud and cybercrime continue to escalate. In our recent research, Americans shared that 1 in 3 have been victims of identity theft and 55% have been victims of scams. Unfortunately, incidents are trending upward, which is impacting commercial real estate...

Graham Beene Expands IPX1031 Arkansas, E Texas & N Louisiana

IPX1031 Arkansas, East Texas and Northern Louisiana Amps Up 1031 Coverage with Graham Beene ​  IPX1031 Promotes Graham Beene into 1031 Exchange Sales DALLAS, TX (October 12, 2023) - Investment Property Exchange Services, Inc. (IPX1031) is pleased to announce the...

Pin It on Pinterest