EXCHANGING FOREIGN PROPERTIES

Nov, 2008

What if you own property outside of the United States and you want to utilize Section 1031 for a tax-deferred exchange of that property? Is that okay?

The short answer is, "It depends." It depends upon where your property is located and where the property you wish to acquire is located. Essentially it comes down to "US property for US property" and "foreign property for foreign property." The reason for this is that the code does not consider non-US property to be like-kind to US property. The Virgin Islands and Guam, though, are US territories and can be exchanged for all other US properties.

So if you're tired of that flat overlooking Paris's Parc Monceau, go ahead and exchange it for that beachfront place in Belize.

Please consider IOWA EQUITY EXCHANGE as your source for answers to your questions about Section 1031 like-kind tax-deferred exchanges. Contact us at your convenience for prompt, accurate information. Please think of us for your next exchange.