1031 and personal property - Spidell

1031 and personal property

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Message Board 1031 and personal property

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    • #275248
      Jim Mannie
      Participant

      A client has taken section 179 on tress and irrigation systems, allowed now under the TCJA.  Since it had no basis left, someone told him it is now treated as personal property and as such, now prevented from doing a 1031 exchange (under the same TCJA.  Is this correct or do the tress/irrigation systems keep their original character?  Any guidance is welcomed.

    • #275255
      Diane White
      Participant

      Please look at IRS Notice 2018-227. In my opinion the irrigation system while considered tangible property, not tangible personal property, would still be eligible for the 1031 exchange. The notice specifically mentions irrigation stock.

    • #275262
      Jim Mannie
      Participant

      Not sure this answer the question of whether it and/or the trees become personal property once section 179 reduces their basis to zero.  Can’t find anything out there yet.

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