{"id":13458,"date":"2026-03-29T11:58:56","date_gmt":"2026-03-29T11:58:56","guid":{"rendered":"https:\/\/wcginc.com\/kb-rental-property\/1031-like-kind-exchange\/"},"modified":"2026-03-31T02:58:06","modified_gmt":"2026-03-31T02:58:06","slug":"1031-like-kind-exchange","status":"publish","type":"epkb_post_type_3","link":"https:\/\/wcginc.com\/kb-rental-property\/1031-like-kind-exchange\/","title":{"rendered":"Selling Your Rental Property- 1031 Like-Kind Exchange"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 ez-toc-wrap-right counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table Of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/wcginc.com\/kb-rental-property\/1031-like-kind-exchange\/#Ineligible_Property\" >Ineligible Property<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/wcginc.com\/kb-rental-property\/1031-like-kind-exchange\/#Deadlines_and_Spend\" >Deadlines and Spend<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/wcginc.com\/kb-rental-property\/1031-like-kind-exchange\/#1031_Exchange_Qualified_Intermediary\" >1031 Exchange Qualified Intermediary<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/wcginc.com\/kb-rental-property\/1031-like-kind-exchange\/#Personal_Property_Section_1245\" >Personal Property (Section 1245)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/wcginc.com\/kb-rental-property\/1031-like-kind-exchange\/#State_Issues_with_1031_Like-kind_Exchanges\" >State Issues with 1031 Like-kind Exchanges<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/wcginc.com\/kb-rental-property\/1031-like-kind-exchange\/#Improvement_1031_Exchange\" >Improvement 1031 Exchange<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/wcginc.com\/kb-rental-property\/1031-like-kind-exchange\/#Lazy_1031_And_Tax_Arbitrage\" >Lazy 1031 And Tax Arbitrage<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/wcginc.com\/kb-rental-property\/1031-like-kind-exchange\/#Reverse_1031_Exchange\" >Reverse 1031 Exchange<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/wcginc.com\/kb-rental-property\/1031-like-kind-exchange\/#721_Exchange\" >721 Exchange<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/wcginc.com\/kb-rental-property\/1031-like-kind-exchange\/#Delaware_Statutory_Trusts_DST\" >Delaware Statutory Trusts (DST)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/wcginc.com\/kb-rental-property\/1031-like-kind-exchange\/#Tax_Bomb\" >Tax Bomb<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/wcginc.com\/kb-rental-property\/1031-like-kind-exchange\/#Cost_Segregation_Study_on_Replacement_Property\" >Cost Segregation Study on Replacement Property<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/wcginc.com\/kb-rental-property\/1031-like-kind-exchange\/#Revenue_Procedure_2008-16\" >Revenue Procedure 2008-16<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/wcginc.com\/kb-rental-property\/1031-like-kind-exchange\/#Pulling_Money_Out_Your_1031_Like-Kind_Exchange\" >Pulling Money Out Your 1031 Like-Kind Exchange<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/wcginc.com\/kb-rental-property\/1031-like-kind-exchange\/#Thoughtful_Tax_Planning_with_1031_Exchanges\" >Thoughtful Tax Planning with 1031 Exchanges<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/wcginc.com\/kb-rental-property\/1031-like-kind-exchange\/#Problems_with_1031_Exchanges\" >Problems with 1031 Exchanges<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/wcginc.com\/kb-rental-property\/1031-like-kind-exchange\/#Summary_of_1031_Like-Kind_Exchanges\" >Summary of 1031 Like-Kind Exchanges<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/wcginc.com\/kb-rental-property\/1031-like-kind-exchange\/#I_Just_Got_A_Rental_What_Do_I_Do_2026_Edition\" >I Just Got A Rental, What Do I Do? 2026 Edition<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/wcginc.com\/kb-rental-property\/1031-like-kind-exchange\/#Rental_Expert_Pod_the_REP\" >Rental Expert Pod (the REP)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/wcginc.com\/kb-rental-property\/1031-like-kind-exchange\/#Talk_to_a_Real_Estate_CPA_About_Your_Rental_Property\" >Talk to a Real Estate CPA About Your Rental Property<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/wcginc.com\/kb-rental-property\/1031-like-kind-exchange\/#Schedule_Discovery_Meeting_Now\" >Schedule Discovery Meeting Now<\/a><\/li><\/ul><\/nav><\/div>\n<div class=\"wpb-content-wrapper\"><p>[vc_row][vc_column][vc_column_text css=&#8221;&#8221; woodmart_inline=&#8221;no&#8221; text_larger=&#8221;no&#8221;]<img decoding=\"async\" class=\"size-full wp-image-41465 alignright\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/292261_236759026_1031_like_kind_exchange_300-1-1.jpg\" alt=\"\" width=\"300\" height=\"200\" \/>By <strong>Jason Watson, CPA<\/strong><br \/>\nPosted Monday, March 30, 2026<\/p>\n<p>When you sell a rental property, either as an investment or as a business, you can invoke IRC Section 1031 to fully defer your capital gains tax including taxes associated with depreciation recapture, as long as you buy another similar property within 6 months. This is also called a like-kind exchange.<\/p>\n<p>Do this right, and you can daisy-chain real estate investment transactions to avoid capital gains on real estate through your entire life, while enjoying the benefits of larger and larger incomes (the assumption is that you \u201c1031\u201d into larger investments with better cash flow, etc.). Said differently, your equity in the old property becomes the downstroke or down payment for the new property, and when leveraged correctly, you can quickly expand your buying power.<\/p>\n<p>You can also view a portion of the down payment as an interest-free loan from the IRS. Huh? If you paid capital gains tax on the growth, your down payment is reduced by 15% to 23.8%. This can lower your purchasing power significantly assuming a structured purchase with equity and debt (mortgage).<\/p>\n<p>Therefore, you can leverage 1031 like-kind exchanges to grow your rental property kingdom without having to pay taxes on the churn. What do we mean? If you wanted to get out of your Tesla stock position to dump money into Apple, you would pay capital gains taxes on your Tesla disposition along the way. Real estate property avoids this trap. This makes sense since real estate churn, if you will, invigorates the economy because so many players get paid within a transaction. Our tax code loves to encourage economic growth.<\/p>\n<p>Let\u2019s talk about purchasing power. By not having to pay taxes on your real estate gains, this ultimate increase in down payment can boost your purchasing power through leverage. In other words, what purchases more- $100,000 or $120,000 as a down payment?<\/p>\n<p>This is overly simplified but highlights the objective. Scenario A is leveraging with a 1031 like-kind exchange while scenario B is leveraging after paying taxes along the way.<\/p>\n<table style=\"width: 80%;\">\n<tbody>\n<tr>\n<td style=\"text-align: left; width: 60%;\"><\/td>\n<td style=\"text-align: center; width: 19%;\"><strong>Scenario A<u><br \/>\n<\/u>1031 Exchange<\/strong><\/td>\n<td style=\"text-align: center; width: 2%;\"><\/td>\n<td style=\"text-align: center; width: 19%;\"><strong>Scenario B<u><br \/>\n<\/u>Paying Taxes<\/strong><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 60%;\">Single Family Home in 2020<\/td>\n<td style=\"text-align: center; width: 19%;\">350,000<\/td>\n<td style=\"text-align: center; width: 2%;\"><\/td>\n<td style=\"text-align: center; width: 19%;\">350,000<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 60%;\">Equity in 2025 (down payment + growth)<\/td>\n<td style=\"text-align: center; width: 19%;\">175,000<\/td>\n<td style=\"text-align: center; width: 2%;\"><\/td>\n<td style=\"text-align: center; width: 19%;\">154,000<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 60%;\"><\/td>\n<td style=\"text-align: center; width: 19%;\"><\/td>\n<td style=\"text-align: center; width: 2%;\"><\/td>\n<td style=\"text-align: center; width: 19%;\"><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 60%;\">Down payment on 8-Unit in 2025<\/td>\n<td style=\"text-align: center; width: 19%;\">175,000<\/td>\n<td style=\"text-align: center; width: 2%;\"><\/td>\n<td style=\"text-align: center; width: 19%;\">154,000<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 60%;\">Purchasing Power @ 80% LTV<\/td>\n<td style=\"text-align: center; width: 19%;\">875,000<\/td>\n<td style=\"text-align: center; width: 2%;\"><\/td>\n<td style=\"text-align: center; width: 19%;\">770,000<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 60%;\">Equity in 2030 (down payment + growth)<\/td>\n<td style=\"text-align: center; width: 19%;\">393,750<\/td>\n<td style=\"text-align: center; width: 2%;\"><\/td>\n<td style=\"text-align: center; width: 19%;\">308,000<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 60%;\"><\/td>\n<td style=\"text-align: center; width: 19%;\"><\/td>\n<td style=\"text-align: center; width: 2%;\"><\/td>\n<td style=\"text-align: center; width: 19%;\"><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 60%;\">Down payment on Commercial Property 2030<\/td>\n<td style=\"text-align: center; width: 19%;\">393,750<\/td>\n<td style=\"text-align: center; width: 2%;\"><\/td>\n<td style=\"text-align: center; width: 19%;\">308,000<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 60%;\">Purchasing Power @ 80% LTV<\/td>\n<td style=\"text-align: center; width: 19%;\">1,968,750<\/td>\n<td style=\"text-align: center; width: 2%;\"><\/td>\n<td style=\"text-align: center; width: 19%;\">1,540,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>What happened here is that a real estate investor took $70,000 and purchased a single-family home in 2020. It grew in value, and the investor exchanged it for an 8-unit using the proceeds from the single-family rental property as the down payment for the next purchase. Lather. Rinse. Repeat.<\/p>\n<p>We took some liberties on the growth factor, and for the \u201cno 1031\u201d column, we assumed a straight 20% capital gains tax rate. Your mileage might vary, but these calculations highlight the foundation of why a like-kind exchange is used.<\/p>\n<p style=\"padding-left: 40px;\"><span style=\"color: #a08750;\"><strong>Sidebar:<\/strong><\/span> Think of how much additional taxable revenue is created by encouraging real estate transactions with like-kind exchanges. Real estate commissions, title fees, inspection fees, among other triggered revenue, becomes taxable income of sorts for the IRS. Non-taxable transaction to you still generates a few tax bucks for the Treasury.<\/p>\n<p>To top all this off, your heirs still get a full step up in basis upon your death under current tax law. Sounds easy, right? When\u2019s the last time money was easy? There are some hurdles-<\/p>\n<ul>\n<li>Ineligible Property<\/li>\n<\/ul>\n<ul>\n<li>Deadlines (time) and spend (money)<\/li>\n<\/ul>\n<ul>\n<li>1031 Exchange Qualified Intermediary<\/li>\n<\/ul>\n<ul>\n<li>Section 1245 property (cost segregation woes)<\/li>\n<\/ul>\n<ul>\n<li>State Issues<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Ineligible_Property\"><\/span>Ineligible Property<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Properties are of like-kind if they\u2019re of the same nature or character, even if they differ in grade or quality. In a like-kind exchange, both the real property you give up and the real property you receive must be held by you for investment or for productive use in your trade or business.<\/p>\n<p>The rules for like-kind exchanges do not apply to exchanges of the following property-<\/p>\n<ul>\n<li>Real property used for personal purposes, such as your home.<\/li>\n<\/ul>\n<ul>\n<li>Real property held primarily for sale (think fix and flips, or home builder).<\/li>\n<\/ul>\n<ul>\n<li>Any personal or intangible property (but there is an exception for incidental property, keep reading).<\/li>\n<\/ul>\n<p>The caveat of \u201cinvestment or for productive use in your trade or business\u201d is not super limiting. It is important, as we\u2019ve seen in other sections of this chapter, for certain tax benefits involving passive activity loss limits.<\/p>\n<p>Get a load of this- according to the IRS website, certain exchanges of mutual ditch, reservoir or irrigation stock are still eligible for non-recognition of gain or loss as like-kind exchanges. What the heck is that? Colorado State University states, \u201cA mutual ditch company is a private, voluntary, non-profit, fee-collecting entity. The company holds water rights, and members purchase shares in the company. Water is allocated annually by share, and shareholders pay assessments for company upkeep.\u201d Who knew?<\/p>\n<p>Can you exchange investment land for a building? Yes. But if that land was for your dream home initially, then it is unlikely eligible.<\/p>\n<p>Can you exchange a U.S. property for a foreign property? No.<\/p>\n<p>Can you exchange foreign property for another foreign property? Yes.<\/p>\n<p>Can you exchange a property in California for one in Texas? Yes, but you have an annual California filing requirement.<\/p>\n<p>Can you exchange oil and gas interests? Tenant in common interest in a real property? Yes and Yes.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Deadlines_and_Spend\"><\/span>Deadlines and Spend<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Two definitions real quick- relinquished property is what you are selling, and replacement property is what you are buying. Rules to exchange by-<\/p>\n<ul>\n<li>Replacement property must be identified within 45 days.<\/li>\n<\/ul>\n<ul>\n<li>Replacement property must be purchased (fully closed) within 180 days.<\/li>\n<\/ul>\n<ul>\n<li>Replacement property should be of equal or greater value to the one being sold.<\/li>\n<\/ul>\n<p>Identifying the replacement property must be handled correctly. Here is a blurb from <a href=\"https:\/\/www.irs.gov\/pub\/irs-news\/fs-08-18.pdf\" target=\"_blank\" rel=\"noopener\">IRS Fact Sheet 2008-18<\/a>,<\/p>\n<p style=\"padding-left: 40px;\">The first limit is that you have 45 days from the date you sell the relinquished property to identify potential replacement properties. The identification must be in writing, signed by you and delivered to a person involved in the exchange like the seller of the replacement property or the qualified intermediary. However, notice to your attorney, real estate agent, accountant or similar persons acting as your agent is not sufficient.<\/p>\n<p>Replacement properties must be clearly described in the written identification. In the case of real estate, this means a legal description, street address or distinguishable name. Follow the IRS guidelines for the maximum number and value of properties that can be identified.<\/p>\n<p>Woah. Look at that last sentence. There is a maximum number of properties and value? Yes, there is! <a href=\"https:\/\/www.irs.gov\/publications\/p544\" target=\"_blank\" rel=\"noopener\">IRS Publication 544 Sale and Other Dispositions of Assets<\/a> reads,<\/p>\n<p style=\"padding-left: 40px;\">You can identify more than one replacement property. However, regardless of the number of properties you give up, the maximum number of replacement properties you can identify is:<\/p>\n<p style=\"padding-left: 40px;\">1. Three properties regardless of their fair market value; or<\/p>\n<p style=\"padding-left: 40px;\">2. Any number of properties whose total fair market value at the end of the identification period is not more than double the total fair market value, on the date of transfer, of all properties you give up.<\/p>\n<p>Fun!<\/p>\n<h2><span class=\"ez-toc-section\" id=\"1031_Exchange_Qualified_Intermediary\"><\/span>1031 Exchange Qualified Intermediary<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The intermediary can be a person, company, or other entity, but must not be related or married to the taxpayer. In other words, they must be professionally detached and disinterested in the transactions.<\/p>\n<p>According to the <a href=\"https:\/\/www.irs.gov\/pub\/irs-news\/fs-08-18.pdf\" target=\"_blank\" rel=\"noopener\">IRS Fact Sheet 2008-18<\/a>,<\/p>\n<p style=\"padding-left: 40px;\">You cannot act as your own facilitator. In addition, your agent (including your real estate agent or broker, investment banker or broker, accountant, attorney, employee or anyone who has worked for you in those capacities within the previous two years) cannot act as your facilitator.<\/p>\n<p>The Fact Sheet also warns real estate investors of the possibility of the 1031 exchange qualified intermediary going bankrupt or being unable to fulfill the transaction leaving the investor non-compliant. Lovely.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Personal_Property_Section_1245\"><\/span>Personal Property (Section 1245)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>With the Tax Cuts and Jobs Act, personal property was excluded from being exchange eligible. Why do you care? With any real estate property transaction, inherently there is personal property being exchanged. Whether that is identified and valued usually depends on an existing cost segregation study of the relinquished property.<\/p>\n<p>Let\u2019s say you bought a $500,000 short-term rental and the cost segregation report came up with $80,000 in personal property eligible as 5- and 7-year property. Naturally, you accelerate depreciation of these items with bonus depreciation. Later, you enter into a 1031 like-kind exchange with another real estate investment property. Neat. However, a portion of your relinquished property is personal property, which is not eligible for tax-free exchange.<\/p>\n<p>This could be a big deal, right? $80,000 in personal property associated with the rental that is fully depreciated and then later taxed at 37% marginal tax bracket upon depreciation recapture would be a $29,600 surprise tax bill. Wow, that\u2019s a long sentence.<\/p>\n<p>It is doubtful that the fair market value of the personal property would be $80,000 upon resale, but we still have a problem since there is some value. Also, land improvements, such as fences and sidewalks, or otherwise 15-year property, can be considered personal property (Section 1245) or real property (Section 1250) depending on the chosen method of depreciation.<\/p>\n<p>What do you do? Historically, what rental property owners and tax professionals would do is assign ridiculously low fair market values to the personal property portion the transaction, recognize a little bit of depreciation recapture gain, and move along.<\/p>\n<p>This would fail under IRS examination of course. In response, the IRS created a safe harbor of sorts that allows incidental personal property to be exchanged without this pesky depreciation recapture. <a href=\"https:\/\/www.law.cornell.edu\/cfr\/text\/26\/1.1031(k)-1\" target=\"_blank\" rel=\"noopener\">Treasury Regulations Section 1.1031(k)-1(g)(7)(iii)<\/a> reads-<\/p>\n<p style=\"padding-left: 40px;\">(iii) Personal property generally resulting in gain recognition under section 1031(b) that is incidental to real property acquired in an exchange. For purposes of this paragraph (g)(7), personal property is incidental to real property acquired in an exchange if\u2014<\/p>\n<p style=\"padding-left: 40px;\">(A) In standard commercial transactions, the personal property is typically transferred together with the real property; and<\/p>\n<p style=\"padding-left: 40px;\">(B) The aggregate fair market value of the property described in paragraph (g)(7)(iii)(A) of this section transferred with the real property does not exceed 15 percent of the aggregate fair market value of the replacement real property or properties received in the exchange.<\/p>\n<p>Cool. So, in using our example above, if you exchanged your rental property that is now worth $650,000 for another that has a fair market value of $800,000, you have a 15% x $800,000, or $120,000, cushion (ceiling) to the fair market value of the personal property being sold.<\/p>\n<p>Another way to look at this- take the identified personal property\u2019s fair market value in your relinquished property and divide that amount by the replacement property\u2019s purchase price. This number needs to be 15% or less.<\/p>\n<p>To recap- personal property is not eligible for a 1031 like-kind exchange unless it is considered incidental. To be incidental, it needs to be customary in a commercial transaction setting, or its fair market value needs to be 15% or less of the replacement property\u2019s purchase price.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"State_Issues_with_1031_Like-kind_Exchanges\"><\/span>State Issues with 1031 Like-kind Exchanges<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Every state is unique in terms of conforming to federal tax code. Let\u2019s pick on California since it is an easy target. According to California\u2019s instructions, in part, for<a href=\"https:\/\/www.ftb.ca.gov\/forms\/2023\/2023-3840.pdf\" target=\"_blank\" rel=\"noopener\"> 2023 California Form 3840<\/a>,<\/p>\n<p style=\"padding-left: 40px;\">In general, for taxable years beginning on or after January 1, 2015, California law conforms to the IRC as of January 1, 2015. However, there are continuing differences between California and federal law. When California conforms to federal tax law changes, we do not always adopt all of the changes made at the federal level.<\/p>\n<p style=\"padding-left: 40px;\">The source of a gain or loss from the sale or exchange of property located in California is determined at the time the gain or loss is realized. The source of such gain or loss is preserved without regard to when such gain or loss may be recognized.<\/p>\n<p style=\"padding-left: 40px;\">Form FTB 3840 must be filed for the taxable year of the exchange and for each subsequent taxable year, generally until the California source deferred gain or loss is recognized on a California tax return.<\/p>\n<p>What does all this mean?<\/p>\n<ul>\n<li>California adopts federal tax code at its discretion. No kidding.<\/li>\n<\/ul>\n<ul>\n<li>The gain is computed when realized (time of sale) regardless of the gain or loss recognized in the future. This means you could have a taxable gain due to the California even if the eventual sale of the downstream property results in a loss.<\/li>\n<\/ul>\n<ul>\n<li>You must file <a href=\"https:\/\/www.ftb.ca.gov\/forms\/2023\/2023-3840.pdf\" target=\"_blank\" rel=\"noopener\">California Form 3840<\/a> every year until the deferred gain or loss is recognized. You sell in 2026, and have zero footprint in California. You feel good. However, you will file FTB 3840 in 2026, 2027, 2028, etc. until some future sale triggers the recognition of a gain or loss for the 2026 transaction. Yay (not)! Also, FTB 3840 is a standalone form; it does not require a complete California tax return (540, 540NR, etc.).<\/li>\n<\/ul>\n<p>Realized and recognized are terms of art in the accounting profession. In accounting geek-speak, realized gain is defined as the net sale price minus the adjusted tax basis. Recognized gain is the taxable portion of the realized gain. Don\u2019t get too hung up on this.<\/p>\n<p>Again, every state is unique, and every like-kind exchange is equally unique.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Improvement_1031_Exchange\"><\/span>Improvement 1031 Exchange<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>An Improvement 1031, often called a construction exchange, allows real estate investors to use sale proceeds to both purchase a replacement property and fund its necessary renovations or ground-up construction. This strategy is ideal when the purchase price of the new property is lower than the value of the asset sold, as it allows you to build out the remaining value to ensure a fully tax-deferred swap.<\/p>\n<p>The primary challenge is that all improvements must be completed and the property must be transferred within the strict 180-day exchange window. Because you cannot simply take exchange funds to pay a contractor to build on land you already own without blowing the tax deferral, a Qualified Intermediary typically sets up an Exchange Accommodation Titleholder (EAT) to &#8220;park&#8221; the deed while the work is performed. In accordance with 1031 exchange basics, the total value of the improved property (purchase + reno) at the time of the deed transfer must be equal to or greater than the value of the original property sold.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Lazy_1031_And_Tax_Arbitrage\"><\/span>Lazy 1031 And Tax Arbitrage<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>While a formal 1031 exchange is a classic deferral tool, its rigid timelines and strict intermediary requirements can sometimes feel like a straightjacket. Many savvy real estate investors are now opting for the &#8220;lazy 1031&#8221; as a flexible alternative to offset capital gains with significantly less red tape. This approach allows you to bypass typical pesky 1031 like-kind exchange rules.<\/p>\n<p>By combining a new property acquisition with a cost segregation study in the same tax year, you can generate a hefty first-year depreciation deduction to effectively wash out the tax hit from your sale. The strategy becomes even more potent when you apply it to a short-term rental (STR) loophole situation or utilize Real Estate Professional Status (REPS).<\/p>\n<p>The ultimate goal here is true tax arbitrage: paying the tax on the sale at preferential capital gains rates (max 23.8% with NIIT), while using the massive new depreciation deduction to offset your ordinary W-2 or business income at your highest marginal tax bracket (up to 37%).<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Reverse_1031_Exchange\"><\/span>Reverse 1031 Exchange<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>We don\u2019t want to spend too much time on reverse 1031 exchanges. They are an important tool, and there are several qualified intermediaries who can further assist. The generalist gist is this- you purchase the replacement property first. It is amazing. It will add nicely to your real estate investment portfolio. You have a boat anchor to unload first, right? However, you don\u2019t want to let this new property slip away. What do you do? Ergo, the reverse 1031 like-kind exchange.<\/p>\n<p>All the same rules apply to a traditional 1031 like-kind exchange. The high-level process involves the use of an Exchange Accommodator Titleholder. This arrangement basically \u201cparks\u201d the replacement property until the relinquished property is sold, and the exchange loop can be closed.<\/p>\n<p>These are tricky but also very powerful when timing and market conditions don\u2019t exactly align and provide convenience to your real estate investment life.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"721_Exchange\"><\/span>721 Exchange<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Under <a href=\"https:\/\/www.law.cornell.edu\/uscode\/text\/26\/721\" target=\"_blank\" rel=\"noopener\">IRC Section 721<\/a>, \u201cNo gain or loss shall be recognized to a partnership or to any of its partners in the case of a contribution of property to the partnership in exchange for an interest in the partnership.\u201d<\/p>\n<p>We won\u2019t spend much time on these, but you should know that you generally exchange real estate property for units in a partnership entity. The entity is a real estate investment trust (REIT), which often holds real estate through an operating partnership known as an umbrella partnership real estate investment trust (UPREIT). Are there rules and hiccups? Of course!<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Delaware_Statutory_Trusts_DST\"><\/span>Delaware Statutory Trusts (DST)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Like 721 exchanges, we won\u2019t spend too much time on Delaware Statutory Trusts, but you should know they exist. A DST is a separate legal entity created as a trust under Delaware Statutory Law and allows you to co-invest with other investors in one or numerous properties. These are also called a DST 1031 exchange.<\/p>\n<p>They can come to your exchange rescue in a handful of ways-<\/p>\n<ul>\n<li>You don\u2019t have to personally qualify for the debt associated with the replacement properties.<\/li>\n<li>DSTs can help eliminate boot or other transaction inequalities.<\/li>\n<li>Since you can identify up to three replacement properties (transactions if you will), DSTs can serve as your backup plan and help meet 1031 like-kind exchange deadlines.<\/li>\n<li>Delaware Statutory Trusts are built for quick closes, and can spring you into larger investments that might be more stable.<\/li>\n<li>The income generated is passive income which can help offset other passive losses.<\/li>\n<\/ul>\n<p>Not all that glitters is gold so careful research and planning is necessary. Here is a quick list of problems with DSTs-<\/p>\n<ul>\n<li>Lack of control. If you are hands-on investor, DSTs will blow you up. However, they usually have streamlined dispute resolution and generally do not require unanimous voting in favor of using a trustee or some other fiduciary relationship.<\/li>\n<li>Lack of liquidity. The common definition of liquidity is the ease with which an asset can be converted into cash quickly without significantly impacting the asset&#8217;s value.\u201d DSTs are like a marriage- easy to get into, hard to get out.<\/li>\n<\/ul>\n<p>Can\u2019t get enough? Technically, a Delaware Statutory Trust is considered a security under federal securities laws. However, IRS Revenue Ruling 2004-86 reads that a beneficial interest in a DST is considered \u201clike-kind\u201d real estate.<\/p>\n<p>Ok, we spent a bit more time than expected.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Tax_Bomb\"><\/span>Tax Bomb<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>While it might go without saying, we feel compelled to remind real estate investors that 1031 like-kind exchanges can be a tax bomb down the road. Sure, if you never sell and your kingdom passes to your heirs, they will likely enjoy a step-up in basis which wipes out the deferred gains. However, if you look to sell a rental or two every so often to augment retirement income, the depressed cost basis from a series of daisy-chained 1031s could be a tax surprise.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Cost_Segregation_Study_on_Replacement_Property\"><\/span>Cost Segregation Study on Replacement Property<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>We don\u2019t want to get far into the weeds on this, but there is something you should be aware of when you double stack your cost segregation reports. For example, let\u2019s say you purchase a $200,000 rental property, and with accelerated depreciation your adjusted basis is $100,000. When you perform a cost segregation study on your replacement property, you might be limited. How?<\/p>\n<table style=\"width: 70%;\">\n<tbody>\n<tr>\n<td style=\"text-align: left; width: 75%;\">Original Purchase Price of Relinquished Property (a)<\/td>\n<td style=\"text-align: center; width: 25%;\">200,000<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 75%;\">Depreciation Taken (b)<\/td>\n<td style=\"text-align: center; width: 25%;\">100,000<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 75%;\">Adjusted Basis of Relinquished Property (a &#8211; b)<\/td>\n<td style=\"text-align: center; width: 25%;\">100,000<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 75%;\"><\/td>\n<td style=\"text-align: center; width: 25%;\"><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 75%;\">Replacement Property Purchase Price (c)<\/td>\n<td style=\"text-align: center; width: 25%;\">400,000<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 75%;\">Assumed Net Cash Paid in 1031 Exchange (e)<\/td>\n<td style=\"text-align: center; width: 25%;\">200,000<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 75%;\">Adjusted Basis of Replacement Property (a &#8211; b + e) (f)<\/td>\n<td style=\"text-align: center; width: 25%;\">300,000<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 75%;\"><\/td>\n<td style=\"text-align: center; width: 25%;\"><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 75%;\">Adjusted Basis of Replacement Property (f)<\/td>\n<td style=\"text-align: center; width: 25%;\">300,000<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 75%;\">Replacement Property Purchase Price (c)<\/td>\n<td style=\"text-align: center; width: 25%;\">400,000<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 75%;\">Allowable Cost Seg Ratio (f divided by c) (g)<\/td>\n<td style=\"text-align: center; width: 25%;\">75%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Our apologies if this blows things up a bit. The big takeaway is that your adjusted basis of the replacement property is based in part on the relinquished property. From there, a ratio is derived by comparing the adjusted basis to the overall purchase price of the replacement property. In the example above, a ratio of 75% is indicated.<\/p>\n<p>When you perform a cost segregation study on the replacement property, and nice little buckets of 5-, 7- and 15-year property are detailed, you will apply the cost segregation ratio to determine a limit like so-<\/p>\n<table style=\"width: 80%;\">\n<tbody>\n<tr>\n<td style=\"text-align: left; width: 64%;\"><\/td>\n<td style=\"width: 12%; text-align: center;\"><strong>5-Year<\/strong><\/td>\n<td style=\"width: 12%; text-align: center;\"><strong>7-Year<\/strong><\/td>\n<td style=\"width: 12%; text-align: center;\"><strong>15-Year<\/strong><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 64%;\">Cost Segregation of Replacement Property<\/td>\n<td style=\"width: 12%; text-align: center;\">25,000<\/td>\n<td style=\"width: 12%; text-align: center;\">15,000<\/td>\n<td style=\"width: 12%; text-align: center;\">30,000<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 64%;\">Allowable Cost Seg Ratio (g)<\/td>\n<td style=\"width: 12%; text-align: center;\">75%<\/td>\n<td style=\"width: 12%; text-align: center;\">75%<\/td>\n<td style=\"width: 12%; text-align: center;\">75%<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left; width: 64%;\">Allowed Property Value per Cost Seg Ratio Limit<\/td>\n<td style=\"width: 12%; text-align: center;\">18,750<\/td>\n<td style=\"width: 12%; text-align: center;\">11,250<\/td>\n<td style=\"width: 12%; text-align: center;\">22,500<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h2><span class=\"ez-toc-section\" id=\"Revenue_Procedure_2008-16\"><\/span>Revenue Procedure 2008-16<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>1031 Like-kind exchanges are lovely tools to kick the tax bill down the road, and whenever there is free money, or at least the perception of free money, the gamers spring into action. What if you could exchange your vacation or second home by calling it an investment property? That would be amazing, right?<\/p>\n<p>In <a href=\"https:\/\/wcginc.com\/wp-content\/documents\/tax\/IRS_Revenue_Procedure_2008_16.pdf\" target=\"_blank\" rel=\"noopener\">IRS Revenue Procedure 2008-16,<\/a> coming off the heels of <a href=\"https:\/\/wcginc.com\/wp-content\/documents\/taxcourt\/Moore.v.Commissioner.pdf\" target=\"_blank\" rel=\"noopener\">Moore v. Commissioner, T.C. Memo. 2007-134<\/a>, the IRS stated-<\/p>\n<p style=\"padding-left: 40px;\">In Moore v. Commissioner, T.C. Memo. 2007-134, the taxpayers exchanged one lakeside vacation home for another. Neither home was ever rented. Both were used by the taxpayers only for personal purposes. The taxpayers claimed that the exchange of the homes was a like-kind exchange under \u00a7 1031 because the properties were expected to appreciate in value and thus were held for investment. The Tax Court held, however, that the properties were held for personal use and that the \u201cmere hope or expectation that property may be sold at a gain cannot establish an investment intent if the taxpayer uses the property as a residence.\u201d<\/p>\n<p>As such, the IRS came up with some rules. Frankly, they are quite easy to comply with and offer some flexibility. To comply with <a href=\"https:\/\/wcginc.com\/wp-content\/documents\/tax\/IRS_Revenue_Procedure_2008_16.pdf\" target=\"_blank\" rel=\"noopener\">IRS Revenue Procedure 2008-16<\/a>, the vacation home (relinquished property)-<\/p>\n<p>1. Must have been owned by the taxpayer for at least 24 months prior to the 1031 like-kind exchange (the \u201cqualifying period\u201d).<\/p>\n<p>2. Must have been rented for at least 14 days (at fair market rates) in each of the 12-month periods immediately prior to the exchange.<\/p>\n<p>3. Was not used for personal purposes for more than 14 days or 10% of the number of rented days at fair market rates (whichever is greater) during each of the 12-month periods.<\/p>\n<p>Some notables-<\/p>\n<ul>\n<li>Must be rented for at least 14 days in each year; not just one of the years.<\/li>\n<\/ul>\n<ul>\n<li>The language reads 14 days or 10% of the actual rented days. So, if you rented the property out for 200 days at fair market rates, you could use it personally for 20 days.<\/li>\n<\/ul>\n<ul>\n<li>The replacement property (the acquired property) follows similar rules for the next 24 months.<\/li>\n<\/ul>\n<p>The IRS states in their IRS Revenue Procedure 2008-16 that they will not challenge the validity of the 1031 like-kind exchange if real estate investors follow this mini safe harbor. How nice!<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Pulling_Money_Out_Your_1031_Like-Kind_Exchange\"><\/span>Pulling Money Out Your 1031 Like-Kind Exchange<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The problem with selling a real estate investment and performing a 1031 exchange is that your equity is all tied up in the property or series of properties. If you directly take cash out of the deal then this call boot, and is likely taxable income (although there might be some thoughtful tax planning benefits that we discuss in a bit).<\/p>\n<p>What can be done? Once the exchange is completed, you can refinance the debt on the replacement property to pull out cash. You might subscribe to equity stripping to lower your liability exposure or you might want to deploy that cash into other investments. Cash is king, right?<\/p>\n<p>If you are not a big fan of taking on more debt, you can also run a parallel system. This works in either a debt reduction or a cash-out refinance situation. How this works is simple- you keep the cash safely invested at a rate of return that is similar to your cost of debt. At any point where you are not comfortable with the debt or you are not finding better alternative uses for the cash, you can pay down or pay off the loan. We say \u201csimilar to your cost of debt\u201d since you don\u2019t have to completely cover the cost of debt; having options is nice and it might be alright to pay a little extra to have those options. Buy comfort.<\/p>\n<p>Keep in mind that you will need enough income to service the debt. Also, WCG CPAs &amp; Advisors recommends not refinancing the relinquished property prior to the 1031 like-kind exchange. This might appear like an end-around to pull cash out of the exchange transaction which is frowned upon by the IRS.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Thoughtful_Tax_Planning_with_1031_Exchanges\"><\/span>Thoughtful Tax Planning with 1031 Exchanges<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>There are two scenarios where a 1031 like-kind exchange might not be the ideal tax planning move. First, let\u2019s say you have passive activity losses that are being carried forward from the rental property itself or from other similar passive activities (such as other rentals or rental property investments), or both.<\/p>\n<p>By selling outright, your capital gains might be sheltered with related passive activity losses plus you have direct access to the cash. This can be viewed in a similar vein to cost segregation where the play is to accelerate your access to cash. Time value of money type stuff.<\/p>\n<p>The other scenario is similar and involves long-term capital gain losses either from prior year carryovers or current year transactions. Let\u2019s say you sold some stock a bit ago at a significant loss. This loss carryover gets chipped away at $3,000 per year or when you have other capital gains. For example, you have $250,000 in long-term capital loss carryover. If you did nothing, it would take 84 tax returns to completely absorb these losses. Barf.<\/p>\n<p>Alternatively, you could skip a 1031 exchange altogether or structure it carefully to throw some capital gains against your $250,000 loss carryover. You might still have depreciation recapture, but it might be a small price to pay for tax-free access to the remaining cash.<\/p>\n<p>Deferring capital gains is always an objective, but it must be met with careful tax planning if you have passive activity losses or long-term capital losses, or both. WCG CPAs &amp; Advisors recommends a comprehensive tax plan showing the depreciation recapture and capital gains effects before considering a 1031 like-kind exchange. Gain knowledge. Be informed. Make decisions.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Problems_with_1031_Exchanges\"><\/span>Problems with 1031 Exchanges<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>There are a bunch of considerations when contemplating a 1031 like-kind exchange-<\/p>\n<ul>\n<li>If you are selling the property at a loss, you might be better to take the depreciation recapture hit today, regroup and move along.<\/li>\n<\/ul>\n<ul>\n<li>Feeling the massive pressure to identify the replacement properties within 45 days and then actually purchase one of them can be a lot. You might make a bad choice by either buying a lousy asset or paying too much, or both, because of the time pressures. The \u201cgotta buy something\u201d is not a good feeling and rarely yields a good result.<\/li>\n<\/ul>\n<ul>\n<li>Owning the relinquished property in a business entity and buying the replacement property in your personal name, or vise-versa, can invalidate the exchange. The tax identity must be maintained from the relinquished property ownership to the replacement property ownership. This can be a problem where you own a property in a partnership such as a multi-member LLC and you title the replacement property as tenants in common (TIC) with each named member of the former LLC. The like in like-kind extends a bit to the ownership as well.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Summary_of_1031_Like-Kind_Exchanges\"><\/span>Summary of 1031 Like-Kind Exchanges<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Here is a nice summary to wrap up this section-<\/p>\n<ul>\n<li>Entire 1031 exchange process must be completed with 180 calendar days including holidays, weekends and astrological anomalies.<\/li>\n<li>Relinquished property is sold on day 1 and funds are held by qualified intermediary.<\/li>\n<li>Identify replacement property or properties (generally up to 3) by day 45 and notify the qualified intermediary.<\/li>\n<li>Close on all replacement properties by day 180.<\/li>\n<li>Maintain equal or greater amount of equity.<\/li>\n<li>Maintain equal or greater amount of debt.<\/li>\n<\/ul>\n<p>[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_empty_space height=&#8221;25px&#8221;][vc_column_text css=&#8221;&#8221;]<style data-type=\"vc_shortcodes-custom-css\">#wd-69d2f9fcf009f .info-box-title{line-height:40px;font-size:30px;color:#473d3c;}#wd-69d2f9fcf009f .info-box-inner{line-height:26px;font-size:16px;color:#473d3c;}#wd-69d3e2e584de8 .info-box-title{line-height:40px;font-size:30px;color:#473d3c;}#wd-69d3e2e584de8 .info-box-inner{line-height:26px;font-size:16px;color:#473d3c;}#wd-68e97e561482c .info-box-title{line-height:40px;font-size:30px;color:#473d3c;}#wd-68e97e561482c .info-box-inner{line-height:26px;font-size:16px;color:#473d3c;}#wd-68460abfbd4d1 .info-box-title{line-height:60px;font-size:50px;color:#473d3c;}#wd-68460abfbd4d1 .info-box-inner{line-height:26px;font-size:16px;color:#473d3c;}#wd-6880833b7bd6b .info-box-title{line-height:26px;font-size:16px;color:#473d3c;}#wd-6880833b7bd6b .info-box-inner{line-height:22px;font-size:12px;color:#473d3c;}#wd-6880834fd8436 .info-box-title{line-height:26px;font-size:16px;color:#473d3c;}#wd-6880834fd8436 .info-box-inner{line-height:22px;font-size:12px;color:#473d3c;}#wd-6880835d3a0fb .info-box-title{line-height:26px;font-size:16px;color:#473d3c;}#wd-6880835d3a0fb .info-box-inner{line-height:22px;font-size:12px;color:#473d3c;}#wd-68bcf7fc8516a .info-box-title{line-height:40px;font-size:30px;color:#473d3c;}#wd-68bcf7fc8516a .info-box-inner{line-height:26px;font-size:16px;color:#473d3c;}#wd-68bcfc71da664 .info-box-title{line-height:46px;font-size:36px;color:#473d3c;}#wd-68bcfc71da664 .info-box-inner{line-height:26px;font-size:16px;color:#473d3c;}@media (max-width: 1199px) {#wd-69d2f9fcf009f .info-box-title{line-height:34px;font-size:24px;}#wd-69d2f9fcf009f .info-box-inner{line-height:24px;font-size:14px;}#wd-69d3e2e584de8 .info-box-title{line-height:34px;font-size:24px;}#wd-69d3e2e584de8 .info-box-inner{line-height:24px;font-size:14px;}#wd-68e97e561482c .info-box-title{line-height:34px;font-size:24px;}#wd-68e97e561482c .info-box-inner{line-height:24px;font-size:14px;}#wd-68460abfbd4d1 .info-box-title{line-height:50px;font-size:40px;}#wd-6880833b7bd6b .info-box-title{line-height:25px;font-size:15px;}#wd-6880834fd8436 .info-box-title{line-height:25px;font-size:15px;}#wd-6880835d3a0fb .info-box-title{line-height:25px;font-size:15px;}#wd-68bcf7fc8516a .info-box-title{line-height:34px;font-size:24px;}#wd-68bcf7fc8516a .info-box-inner{line-height:24px;font-size:14px;}#wd-68bcfc71da664 .info-box-title{line-height:36px;font-size:26px;}#wd-68bcfc71da664 .info-box-inner{line-height:24px;font-size:14px;}}@media (max-width: 767px) {#wd-69d2f9fcf009f .info-box-title{line-height:28px;font-size:18px;}#wd-69d2f9fcf009f .info-box-inner{line-height:24px;font-size:14px;}#wd-69d3e2e584de8 .info-box-title{line-height:28px;font-size:18px;}#wd-69d3e2e584de8 .info-box-inner{line-height:24px;font-size:14px;}#wd-68e97e561482c .info-box-title{line-height:28px;font-size:18px;}#wd-68e97e561482c .info-box-inner{line-height:24px;font-size:14px;}#wd-68460abfbd4d1 .info-box-title{line-height:40px;font-size:30px;}#wd-6880833b7bd6b .info-box-title{line-height:24px;font-size:14px;}#wd-6880834fd8436 .info-box-title{line-height:24px;font-size:14px;}#wd-6880835d3a0fb .info-box-title{line-height:24px;font-size:14px;}#wd-68bcf7fc8516a .info-box-title{line-height:28px;font-size:18px;}#wd-68bcf7fc8516a .info-box-inner{line-height:24px;font-size:14px;}#wd-68bcfc71da664 .info-box-title{line-height:28px;font-size:18px;}#wd-68bcfc71da664 .info-box-inner{line-height:24px;font-size:14px;}}<\/style><div class=\"wpb-content-wrapper\">[vc_row][vc_column]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-69d2f9fcf009f\" class=\" wd-rs-69d2f9fcf009f wd-info-box wd-wpb text-center box-icon-align-top box-style- color-scheme- wd-bg-none border-btm-title kb \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p style=\"text-align: center;\"><em>Jason Watson, CPA, is a partner and the CEO of <strong>WCG CPAs &amp; Advisors,<\/strong> a boutique yet progressive tax, accounting and <\/em><em>rental property consultation and real estate CPA firm with over 90 team members and 7 partners headquartered in Colorado serving real estate investors worldwide.<\/em><\/p>\n<div style=\"display: flex; justify-content: center;\"><a href=\"https:\/\/www.linkedin.com\/in\/jason-watson-cpa\/\"><img decoding=\"async\" class=\"alignnone wp-image-17327 entered lazyloaded\" style=\"height: 35px!important; width: auto!important;\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/linkedin-150x150-1.png.webp\" alt=\"Jason Watson CPA LinkedIn\" \/><\/a>\u00a0\u00a0\u00a0\u00a0\u00a0<a href=\"mailto:jason@wcginc.com\"><img decoding=\"async\" class=\"alignnone size-thumbnail wp-image-17334 entered lazyloaded\" style=\"height: 35px!important; width: auto!important;\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/mail-150x150-1.png.webp\" alt=\"Jason Watson CPA Email\" \/><\/a><\/div>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column][\/vc_row][vc_row][vc_column]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-69d3e2e584de8\" class=\" wd-rs-69d3e2e584de8 wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none border-btm-title img-right kb \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h2 class=\"info-box-title title wd-font-weight-800 box-title-style-default font-primary wd-fontsize-m\"><span class=\"ez-toc-section\" id=\"I_Just_Got_A_Rental_What_Do_I_Do_2026_Edition\"><\/span>I Just Got A Rental, What Do I Do? 2026 Edition<span class=\"ez-toc-section-end\"><\/span><\/h2>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p><img decoding=\"async\" class=\"alignright wp-image-100749 size-full\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/Web-and-Social-GFX-2026_300.jpg\" alt=\"\" width=\"300\" height=\"360\" \/>This KB article is an excerpt from our 530+ page book (yeah, thick, there are some picture pages, but no scratch and sniff) which was <span style=\"color: #ff0000;\"><strong>updated April 5, 2026<\/strong><\/span>, and is available in paperback from <a href=\"https:\/\/wcginc.com\/amazon-rental\" target=\"_blank\" rel=\"noopener\">Amazon<\/a>, as an eBook for\u00a0<a href=\"https:\/\/wcginc.com\/kindle-rental\" target=\"_blank\" rel=\"noopener\">Kindle<\/a>\u00a0and as a\u00a0<a href=\"https:\/\/wcginc.com\/pdf-rental\" target=\"_blank\" rel=\"noopener\">PDF<\/a>\u00a0from ClickBank. We used to publish with iTunes and Nook, but keeping up with two different formats was brutal. You can cruise through these KB articles online, click on the fancy buttons below or\u00a0<a href=\"\/business-services\/book\/\" target=\"_blank\" rel=\"noopener\">visit our webpage<\/a>\u00a0which provides more information.<\/p>\n<table class=\"purchase-table\">\n<tbody>\n<tr>\n<td style=\"text-align: center;\"><a href=\"\/amazon-rental\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" class=\"alignnone size-full wp-image-6657 aligncenter\" style=\"float: none;\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/amazon-imageresized.png.webp\" alt=\"I Just Got A Rental, What Do I Do? 2025 Edition | Amazon version\" width=\"50\" height=\"50\" \/><\/a><\/td>\n<td style=\"text-align: center;\"><a href=\"\/kindle-rental\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" class=\"alignnone size-full wp-image-6658\" style=\"float: none;\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/kindle-imageresized.png.webp\" alt=\"I Just Got A Rental, What Do I Do? 2025 Edition | Kindle Version\" width=\"50\" height=\"50\" \/><\/a><\/td>\n<td style=\"text-align: center;\"><a href=\"\/pdf-rental\" target=\"_blank\" rel=\"noopener\"><img decoding=\"async\" class=\"alignnone size-full wp-image-6659 aligncenter\" style=\"float: none;\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/PDFresized.png.webp\" alt=\"I Just Got A Rental, What Do I Do? 2025 Edition | PDF version\" width=\"50\" height=\"50\" \/><\/a><\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: center;\"><strong>$32.95<\/strong><\/td>\n<td style=\"text-align: center;\"><strong>$21.95<\/strong><\/td>\n<td style=\"text-align: center;\"><strong>$18.95<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column][\/vc_row][vc_row][vc_column]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-68e97e561482c\" class=\" wd-rs-68e97e561482c wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none border-btm-title img-right kb \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h2 class=\"info-box-title title wd-font-weight-800 box-title-style-default font-primary wd-fontsize-m\"><span class=\"ez-toc-section\" id=\"Rental_Expert_Pod_the_REP\"><\/span>Rental Expert Pod (the REP)<span class=\"ez-toc-section-end\"><\/span><\/h2>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p>WCG's tax team structure is built around Pods \u2014 small, agile groups of tax professionals (4-6 total) who embrace team camaraderie while achieving client intimacy. Each Pod is led by a seasoned tax manager or partner, and together they make up the core of our tax return preparation.<\/p>\n<p>For the 2026 tax season, we\u2019re thrilled to introduce the <a href=\"https:\/\/wcginc.com\/blog\/rental-expert-pod\/\" target=\"_blank\" rel=\"noopener\">Rental Expert Pod<\/a> or REP for short. This is WCG\u2019s dedicated team of real estate CPAs and rental property tax specialists focused on optimizing your tax position, ensuring compliance, and helping you build long-term wealth through smart real estate strategies. [<a href=\"https:\/\/wcginc.com\/blog\/rental-expert-pod\/\" target=\"_blank\" rel=\"noopener\">Learn More<\/a>]<\/p>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column][\/vc_row][vc_row equal_height=\"yes\" content_placement=\"top\" el_id=\"consultation-secc\" woodmart_css_id=\"6756f7d427735\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2NzU2ZjdkNDI3NzM1Iiwic2hvcnRjb2RlIjoidmNfcm93IiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_gradient_switch=\"no\" woodmart_box_shadow=\"no\" wd_z_index=\"no\" woodmart_disable_overflow=\"0\" row_reverse_mobile=\"0\" row_reverse_tablet=\"0\" el_class=\"kb-consult\"][vc_column]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-68460c6336e7f\" class=\" wd-rs-68460c6336e7f wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none border-btm-title kb-fix \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h2 class=\"info-box-title title box-title-style-default wd-fontsize-m\"><span class=\"ez-toc-section\" id=\"Talk_to_a_Real_Estate_CPA_About_Your_Rental_Property\"><\/span>Talk to a Real Estate CPA About Your Rental Property<span class=\"ez-toc-section-end\"><\/span><\/h2>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p>Please use the form below to tell us a little about yourself, and what you have going on with your investments and wealth-building objectives. <strong>WCG CPAs &amp; Advisors<\/strong> are real estate CPAs, tax strategists and rental property consultants, and we look forward to talking to you!<\/p>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[vc_row_inner el_id=\"consultation-inner\" woodmart_css_id=\"66fd6caf92fc0\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2NmZkNmNhZjkyZmMwIiwic2hvcnRjb2RlIjoidmNfcm93X2lubmVyIiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_gradient_switch=\"no\" woodmart_box_shadow=\"no\" wd_z_index=\"no\" woodmart_disable_overflow=\"0\" row_reverse_mobile=\"0\" row_reverse_tablet=\"0\"][vc_column_inner][vc_raw_js el_class=\"defaultBot\"]JTNDc2NyaXB0JTIwdHlwZSUzRCUyMnRleHQlMkZqYXZhc2NyaXB0JTIyJTIwc3JjJTNEJTIyaHR0cHMlM0ElMkYlMkZ3Y2dpbmMuam90Zm9ybS5jb20lMkZqc2Zvcm0lMkYyNTE2NjU1MjUzNjk5NzElMjIlM0UlM0MlMkZzY3JpcHQlM0UlMEE=[\/vc_raw_js][\/vc_column_inner][\/vc_row_inner]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-68460abfbd4d1\" class=\" wd-rs-68460abfbd4d1 wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none border-btm-title defaultBot \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p>The tax advisors, business consultants and rental property experts at <strong>WCG CPAs &amp; Advisors<\/strong> are not salespeople; we are not putting lipstick on a pig expecting you to love it. Our job remains being professionally detached, giving you information and letting you decide within our ethical guidelines and your risk profiles.<\/p>\n<p>We see far too many crazy schemes and half-baked ideas from attorneys and wealth managers. In some cases, they are good ideas. In most cases, all the entities, layering and mixed ownership is only the illusion of precision. As Chris Rock says, just because you can drive your car with your feet doesn\u2019t make it a good idea. In other words, let\u2019s not automatically convert \u201cyou can\u201d into \u201cyou must.\u201d<\/p>\n<p><strong>Let\u2019s chat so you can be smart about it.<\/strong><\/p>\n<p>We typically schedule a 20-minute complimentary quick chat with one of our Partners or our amazing Senior Tax Professionals to determine if we are a good fit for each other, and how an engagement with our team looks. Tax returns only? Business advisory? Tax strategy and planning? Rental property support?<\/p>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[vc_row_inner equal_height=\"yes\" el_class=\"boxes--pack\" woodmart_css_id=\"673b5f334f247\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2NzNiNWYzMzRmMjQ3Iiwic2hvcnRjb2RlIjoidmNfcm93X2lubmVyIiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_gradient_switch=\"no\" woodmart_box_shadow=\"no\" wd_z_index=\"no\" woodmart_disable_overflow=\"0\" row_reverse_mobile=\"0\" row_reverse_tablet=\"0\"][vc_column_inner width=\"1\/3\"]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-6880833b7bd6b\" class=\" wd-rs-6880833b7bd6b wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none business-boxes \">\n\t\t\t\t\t\t\t\t\t\t\t<div class=\"box-icon-wrapper  box-with-icon box-icon-simple\">\n\t\t\t\t\t\t\t<div class=\"info-box-icon\">\n\n\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" width=\"622\" height=\"622\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/Text-WCG-Offices-1.jpg\" class=\"attachment-full size-full\" alt=\"Text WCG Offices\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h4 class=\"info-box-title title wd-font-weight-600 box-title-style-default font-primary wd-fontsize-m\">Text WCG Offices<\/h4>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p>Need to get in touch through a quick text?\u00a0 We\u2019ll respond back within a day and get going!<\/p>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<a class=\"wd-info-box-link wd-fill\" aria-label=\"Infobox link\" href=\"sms:+17193452100?&amp;body=Hey%20WCG!%20Please%20call%20me%20to%20discuss%20your%20CPA%20services\" title=\"\"><\/a>\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column_inner][vc_column_inner width=\"1\/3\"]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-6880834fd8436\" class=\" wd-rs-6880834fd8436 wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none business-boxes \">\n\t\t\t\t\t\t\t\t\t\t\t<div class=\"box-icon-wrapper  box-with-icon box-icon-simple\">\n\t\t\t\t\t\t\t<div class=\"info-box-icon\">\n\n\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" width=\"622\" height=\"622\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/Chat-Our-Amazing-Team-1.jpg\" class=\"attachment-full size-full\" alt=\"Chat our amazing team\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h4 class=\"info-box-title title wd-font-weight-600 box-title-style-default font-primary wd-fontsize-m\">Call Our Amazing Team<\/h4>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p class=\" \">If you need to speak to a tax professional now, give us a call and we'll get you connected.<\/p>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<a class=\"wd-info-box-link wd-fill\" aria-label=\"Infobox link\" href=\"tel:719-387-9800\" title=\"\"><\/a>\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column_inner][vc_column_inner width=\"1\/3\"]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-6880835d3a0fb\" class=\" wd-rs-6880835d3a0fb wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none business-boxes nav-button-chat \">\n\t\t\t\t\t\t\t\t\t\t\t<div class=\"box-icon-wrapper  box-with-icon box-icon-simple\">\n\t\t\t\t\t\t\t<div class=\"info-box-icon\">\n\n\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" width=\"622\" height=\"622\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/Chat-With-a-Tax-Pro-2.jpg\" class=\"attachment-full size-full\" alt=\"Chat with a tax pro\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h4 class=\"info-box-title title wd-font-weight-600 box-title-style-default font-primary wd-fontsize-m\">Chat With a Tax Pro<\/h4>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p>Taxes can be tricky. Chat with a WCG human now and get questions answered.<\/p>\n<\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column_inner][\/vc_row_inner][\/vc_column][\/vc_row][vc_row equal_height=\"yes\" content_placement=\"top\" woodmart_css_id=\"684abef7ecaa9\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2ODRhYmVmN2VjYWE5Iiwic2hvcnRjb2RlIjoidmNfcm93IiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_gradient_switch=\"no\" woodmart_box_shadow=\"no\" wd_z_index=\"no\" woodmart_disable_overflow=\"0\" row_reverse_mobile=\"0\" row_reverse_tablet=\"0\" el_class=\"kb-consult\"][vc_column]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-68bcf7fc8516a\" class=\" wd-rs-68bcf7fc8516a wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none border-btm-title \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t<h2 class=\"info-box-title title wd-font-weight-600 box-title-style-default font-primary wd-fontsize-m\"><span class=\"ez-toc-section\" id=\"Schedule_Discovery_Meeting_Now\"><\/span>Schedule Discovery Meeting Now<span class=\"ez-toc-section-end\"><\/span><\/h2>\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><\/div>\n\n\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[vc_row_inner content_placement=\"middle\" el_class=\"client-review-secs box--card\" woodmart_css_id=\"672e712482714\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2NzJlNzEyNDgyNzE0Iiwic2hvcnRjb2RlIjoidmNfcm93X2lubmVyIiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_gradient_switch=\"no\" woodmart_box_shadow=\"no\" wd_z_index=\"no\" woodmart_disable_overflow=\"0\" row_reverse_mobile=\"0\" row_reverse_tablet=\"0\"][vc_column_inner width=\"1\/3\" woodmart_css_id=\"671780b35b49a\" parallax_scroll=\"no\" woodmart_sticky_column=\"false\" wd_collapsible_content_switcher=\"no\" wd_column_role_offcanvas_desktop=\"no\" wd_column_role_offcanvas_tablet=\"no\" wd_column_role_offcanvas_mobile=\"no\" wd_column_role_content_desktop=\"no\" wd_column_role_content_tablet=\"no\" wd_column_role_content_mobile=\"no\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_box_shadow=\"no\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2NzE3ODBiMzViNDlhIiwic2hvcnRjb2RlIjoidmNfY29sdW1uX2lubmVyIiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" wd_z_index=\"no\"]\t\t<div id=\"wd-68874e76cd7bc\" class=\"wd-image wd-wpb wd-rs-68874e76cd7bc text-left \">\n\t\t\t\n\t\t\t<img decoding=\"async\" width=\"300\" height=\"200\" src=\"https:\/\/wcginc.com\/wp-content\/uploads\/265518_2057667071_tax_consultation_300-1.webp\" class=\"attachment-full size-full\" alt=\"Request a Meeting with WCG Inc\" \/>\n\t\t\t\t\t<\/div>\n\t\t[\/vc_column_inner][vc_column_inner width=\"2\/3\" woodmart_css_id=\"671780c0415fb\" parallax_scroll=\"no\" woodmart_sticky_column=\"false\" wd_collapsible_content_switcher=\"no\" wd_column_role_offcanvas_desktop=\"no\" wd_column_role_offcanvas_tablet=\"no\" wd_column_role_offcanvas_mobile=\"no\" wd_column_role_content_desktop=\"no\" wd_column_role_content_tablet=\"no\" wd_column_role_content_mobile=\"no\" mobile_bg_img_hidden=\"no\" tablet_bg_img_hidden=\"no\" woodmart_parallax=\"0\" woodmart_box_shadow=\"no\" responsive_spacing=\"eyJwYXJhbV90eXBlIjoid29vZG1hcnRfcmVzcG9uc2l2ZV9zcGFjaW5nIiwic2VsZWN0b3JfaWQiOiI2NzE3ODBjMDQxNWZiIiwic2hvcnRjb2RlIjoidmNfY29sdW1uX2lubmVyIiwiZGF0YSI6eyJ0YWJsZXQiOnt9LCJtb2JpbGUiOnt9fX0=\" wd_z_index=\"no\"]\t\t\t<div class=\"info-box-wrapper\">\n\t\t\t\t<div id=\"wd-68bcfc71da664\" class=\" wd-rs-68bcfc71da664 wd-info-box wd-wpb text-left box-icon-align-top box-style- color-scheme- wd-bg-none with-btn box-btn-static \">\n\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-content\">\n\t\t\t\t\t\t\t\t\t\t\t\t<div class=\"info-box-inner reset-last-child\"><p>Ready to schedule now and talk all things rentals? Let's do it! Here is a link to a Discovery Meeting with one of our Partners or Senior Tax Professionals to understand your tax footprint and objectives, and how <strong>WCG CPAs &amp; Advisors<\/strong> might help.<\/p>\n<\/div>\n\n\t\t\t\t\t\t<div class=\"info-btn-wrapper\"><div id=\"wd-6a319a9c43c7f\" class=\"  wd-button-wrapper text-left\"><a href=\"https:\/\/calendly.com\/wcg-cpas-advisors\/discovery-meeting-instant\" title=\"\" target=\"_blank\" class=\"btn btn-style-default btn-shape-rectangle btn-size-default\">Schedule Meeting<\/a><\/div><\/div>\t\t\t\t\t<\/div>\n\n\t\t\t\t\t\n\t\t\t\t\t<style><\/style>\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t[\/vc_column_inner][\/vc_row_inner][\/vc_column][\/vc_row]<\/div>[\/vc_column_text][\/vc_column][\/vc_row]<\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>When you sell a rental property, either as an investment or as a business, you can invoke IRC Section 1031 to fully defer your capital gains tax including taxes associated with depreciation recapture, as long as you buy another similar property within 6 months. This is also called a like-kind exchange.<\/p>\n","protected":false},"author":6,"featured_media":31844,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":false,"footnotes":""},"epkb_post_type_3_category":[178],"epkb_post_type_3_tag":[],"class_list":["post-13458","epkb_post_type_3","type-epkb_post_type_3","status-publish","has-post-thumbnail","hentry","epkb_post_type_3_category-chap-11-operational-asset-management"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.8 (Yoast SEO v27.8) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Selling Your Rental Property- 1031 Like-Kind Exchange - Depreciation Recapture - WCG CPAs &amp; Advisors<\/title>\n<meta name=\"description\" content=\"You invoke Section 1031 to fully defer your capital gains tax including taxes associated with depreciation recapture. Daisy-chain real estate transactions.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/wcginc.com\/kb-rental-property\/1031-like-kind-exchange\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Selling Your Rental Property- 1031 Like-Kind Exchange\" \/>\n<meta property=\"og:description\" content=\"You invoke Section 1031 to fully defer your capital gains tax including taxes associated with depreciation recapture. 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