You often want to use tax code Section 1031 to avoid paying taxes on your existing property when acquiring replacement property.
As under prior law, you may continue to use Section 1031, but on real property only. Your ability to use a Section 1031 tax-deferred exchange on personal property, such as your business vehicle, airplane, equipment, and collectibles, is gone. Tax reform killed it.
Your new inability to use a Section 1031 tax-deferred exchange for personal property means that you no longer treat a business vehicle trade-in as a non-taxable event. Now, it’s a taxable event.
But having a taxable event does not necessarily mean that you are going to pay more taxes. There’s more than one nifty silver lining for many business taxpayers in this lost ability.
Silver Lining Number 1: Creating Cash
If you pay ... Log in to view full article.