If the sale of such personal property will result in a capital gain tax, the taxpayer may want to consider an exchange. The relinquished and replacement properties must be in the same General Asset Class or Product Class. Goodwill of one business is not considered like-kind with goodwill of another business and is therefore not eligible for exchange treatment. 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. Fidelity National 1031 Exchange Services, Inc. cannot provide advice regarding specific tax consequences.