1031 Tax Exchanges

Montana Real Estate Agent for Like-Kind and 1031 Tax Exchanges 2012 - Real Estate Properties in Bozeman, Belgrade, Big Sky, Gallatin Gateway, Manhattan, Three Forks, Livingston, Ennis, Dillon.

Like-Kind Exchanges - Real Estate Tax Tips

Check Your Montana State Income Tax Bracket

Generally, if you exchange business or investment property solely for business or investment property of a like-kind, no gain or loss is recognized under Internal Revenue Code Section 1031. If, as part of the exchange, you also receive other (not like-kind) property or money, gain is recognized to the extent of the other property and money received, but a loss is not recognized.

Section 1031 does not apply to exchanges of inventory, stocks, bonds, notes, other securities or evidence of indebtedness, or certain other assets.

Like-Kind Properties

Properties are of like-kind if they are of the same nature or character, even if they differ in grade or quality. Personal properties of a like class are like-kind properties. However, livestock of different sexes are not like-kind properties. Also, personal property used predominantly in the United States and personal property used predominantly outside the United States are not like-kind properties.

Real Properties generally are of like-kind regardless of whether the properties are improved or unimproved. However, real property in the United States and real property outside the United States are not like-kind properties.

Find Montana Real Estate Source Income Tax Information 

1031 References and Related Topics

Example of the Benefits of Exchanging vs Selling

Let's assume a sale Price of $250,000.00 with a loan of $100,000.00, and the property was purchased for $150,000.00 a few years ago.

Capital Gain: $100,000.00

Capital Gain Tax:
$100,000.00 x 28% = $28.000.00


Sales Purchase


Sale Proceeds



Tax Payable



Cash Available
For Investment



Investment with 25% down



This example demonstrates an additional $112,000 of purchasing power.

 Montana Property Tax Information


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