Under RE Exchanges Personal property held for investment or for productive use in a trade or business may qualify for Tax Deferred Exchange treatment. If the sale of such personal property will result in a capital gain tax, the taxpayer may want to consider an exchange. The Product Classes are from Division D of the Standard Industrial Classification Manual of 1987 that has recently been merged into the new North American Industry Classification System. Covenants not to compete are not subject to capital gain taxes, and therefore, are not exchangeable.
Tax advisors are essential for a successful personal property exchange.
The advisor will help determine values, allocate sale price and purchase price to the elements of the transaction and recommend the terms of the transaction. Investment Property Exchange Services, Inc. cannot provide advice regarding specific tax consequences. Investors considering an IRC 1031 exchange should seek the counsel of their accountant and attorney to obtain professional and legal advice.