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UP / Thumb of Michigan | From Google:
No, you cannot do a 1031 exchange from silver to land because the Tax Cuts and Jobs Act of 2017 eliminated 1031 exchanges for personal property like precious metals, and they now apply only to real property. You can exchange one type of real estate for another (like land), but the sale of silver is considered a taxable event and the proceeds cannot be used in a 1031 exchange for real estate.
Why a 1031 exchange is not possible for silver
Personal property vs. real property: Section 1031 of the tax code was modified by the Tax Cuts and Jobs Act of 2017 to apply only to exchanges of real property, such as land and buildings.
Elimination of personal property exchanges: The act specifically removed personal and intangible property, including silver, from the list of eligible assets for 1031 exchanges.
Taxable event: Selling silver, even if you intend to reinvest the proceeds into a property, is a taxable sale. You will owe capital gains tax on any profit from the sale of the silver.
How to defer taxes on real estate investments
Use a 1031 exchange for real estate: You can still use a 1031 exchange to defer capital gains tax if you sell an investment property (like a rental house) and buy another like-kind real estate property (like land).
Follow the rules: For a valid exchange, you must use a qualified intermediary to hold the funds and meet strict timelines: identify the replacement property within 45 days and close on it within 180 days of selling the original property.
Consult a professional: It is always recommended to consult with a tax advisor or CPA to ensure you meet all the requirements for a 1031 exchange and to understand the tax implications of your investments. | |
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Can you 1031 silver to land?
