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We are considering selling our portrait photography studio with about one acre of land. We want to know if we can use the 1031 exchange rule to use the money that would be taxed to reinvest into rental property.

Hi Elaine! 1031 Exchange properties are those considered a like-kind by the IRS. This includes business real estate and land. So if you are selling a portrait studio, if the business owns the building and the land that it occupies, you may sell it and exchange for a rental property. However, it should be noted that you cannot sell the business itself in exchange for real estate. This will not work. The like-kind rule covers the equipment in a business, though it must be exchanged for like-kind business equipment, ie computers for computers, desk chairs for desk chairs, etc.

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This was written by james. Posted on Sunday, January 15, 2012, at 10:16 am. Filed under 1031 Exchange Qualifies. Tagged . Bookmark the permalink. Follow comments here with the RSS feed. Post a comment or leave a trackback.

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