These Types Of Property Can Be Exchanged Via A Drop And Swap 1031
Are you thinking about completing a drop-and-swap 1031 transaction? There are many reasons why you might be considering this type of property swap, but you first need to know what kinds of property qualify.
Not sure what kind of property is eligible for this kind of transaction? Here is a look at the types of property that can be exchanged via a drop-and-swap 1031 transaction.
Multi-Family Rentals
One type of property that can be exchanged via a drop-and-swap 1031 transaction is multi-family rentals. These are properties that have two or more units that are rented out to tenants.
If you own a duplex, for example, you could exchange it for another rental property via a 1031 transaction. The same applies to a condominium or apartment building, no matter the size.
Vacant Lots
Another type of property that can be exchanged via a 1031 transaction is a vacant lot. If you own a vacant lot, you can use it as part of a property swap transaction.
This is a great way to exchange a property that you no longer want for one that better suits your needs. Perhaps you wanted to improve the lot but found another lot that is a better match.
Oil & Gas Interests
You can also exchange oil and gas interests via a 1031 transaction. If you own an interest in an oil or gas property, you can use it as part of a 1031 exchange.
This can be a great way to diversify your investment portfolio and exchange a property that you no longer want for one that is a better fit.
Water Rights
Another type of property that can be exchanged via a 1031 transaction is water rights. For example, you can trade the right to use a certain amount of water from a specific body of water. This could be beneficial if you are looking to exchange property in one climate for property in another.
Learn More About Drop-and-Swap 1031 Transactions
These are just a few of the types of property that can be exchanged via a drop-and-swap 1031 transaction. If you are considering this type of transaction, be sure to contact a qualified 1031 exchange expert.
A tax professional can help you through the process and ensure everything is done accurately and timely. Set up a meeting to learn more about these types of programs and how you can put them to use.
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