Atlanta Deferred Exchange
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Atlanta Deferred Exchange

Can I use a 1031 exchange if I am selling a diner--land, building and equipment?

 

Q: I currently own a diner. I have recently entered into a contract to sell my restaurant, the underlying land, and most of my equipment. I'd like to buy another restaurant nearer to my home. Would an exchange be beneficial to me?

A: A multi-asset exchange might prove very beneficial. Your transaction includes two components: real estate and personal property. If the personal property portion is significant, you may want to consider this exchange technique. Although the definition of like-kind is much narrower for business equipment, many times the tax savings is equal to or greater than the deferral of taxes on the real estate portion of the transaction. With careful planning, a multi-asset exchange allows an investor to reap the benefits of an exchange even when both types of property are included in one transaction.