<p>&nbsp;</p>

<p class="text-align-center"><iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" src="https://www.youtube.com/embed/iSfRO69jsxU?controls=0&quot; title="YouTube video player" width="560"></iframe></p>

<p>Land has long been one the greatest investments in United States history. Not only are investors drawn to wide open spaces, but land ownership continues to be a cornerstone of economic security. The concept of land as an asset class has been enhanced by many historical eras and event(s):</p>

<ol>
<li>from the speculation of the founding fathers such as George Washington;</li>
<li>to Railroad Land Grants promoting westward expansion;</li>
<li>to the Oklahoma land rush.</li>
</ol>

<p>This westward push resulted in generational farm and ranch operations existing to this current day, mineral exploration, land conservation, and let’s not overlook the pop culture influenced “hobby” rancher and farmer. Clearly, the buyer and seller space is diverse. Interested parties include confined city dwellers romanticizing the notion of owning their own plot in the west, to generational farmers and ranchers who desire to sell and retire because they are left with no remaining heirs or successors to manage the operation.</p>

<p>Fortunately, IRC Section 1031, or as it is more commonly known, 1031 Exchange, provides a vehicle for buyers and sellers of land to defer taxes on these transactions.</p>

<p>After passing through a couple preliminary screening factors such as the (1) <a href="/blog/irc-section-1031-exchange-qualified-use-requirements" title="Qualified Use Requirements in a 1031 Exchange">qualified use requirement and holding period</a> many often overlooked land interests are eligible for 1031 Exchange treatment and capital gains tax deferral.</p>

<p>Historically, the fee simple interest is the obvious candidate for the 1031 Exchange. A fee simple interest is the greatest possible estate in land, wherein the owner has the right to use it, exclusively possess it, commit waste (legal term) upon it, take its fruits and dispose of it by deed or will. A fee simple interest represents absolute ownership of land and the most common type of land ownership.</p>

<p>But the fee simple interest conveyed by deed only scratches the surface of 1031 Exchange eligible land interests. There are many other 1031 Exchange eligible real property interests or intangible interests in land.</p>

<h2>Real Property Intangibles</h2>

<p>In December 2020, the Department of Treasury issued Final Regulations to more particularly identify what constitutes “real property” for 1031 Exchange purposes. It was generally believed this guidance was necessary due to the elimination of personal property exchanges in the Tax Cuts and Jobs Act of 2017. Within the revised regulations the fee simple interest is included in this definition, but so are certain other real property <em>intangibles.</em></p>

<p>Intangibles fall into two categories <em>General Intangibles</em> such as: (1) perpetual easements; land development rights; leasehold estates; bona-fide options to acquire real property; and shares in a mutual ditch, reservoir, or irrigation company that is treated as real estate under state law; and (2) <em>Licenses and Permits</em>.</p>

<p>A license, permit, or other similar right that is solely for the use, enjoyment, or occupation of land or an inherently permanent structure and that is in the nature of a leasehold, an easement or similar right generally is an interest in real property. For instance, transferring a grazing permit issued by the United States Forest Service, Bureau of Land Management, or some other agency is often deemed a transfer of a real property interest for Sec. 1031 purposes. However, a license or permit to engage in or operate a business on real property is not real property or an interest in real property, regardless of its classification under state or local law. An example of ineligible permits and licenses are liquor licenses and gambling licenses.&nbsp;</p>

<p>The takeaway here is §1.1031(a)-3(a)5, provides taxpayers a vehicle to sell and buy real property intangibles in a 1031 Exchange. Taxpayers may use the sale proceeds from an intangible, license, or permit, to acquire other replacement real property such as a single-family rental house.</p>

<h2>The Like-Kind Requirement</h2>

<p>A threshold analysis of the like-kind requirement is vital when intangibles are implicated. Although the like-kind requirement is very broad and almost all real property qualifies as like-kind to other real property, provided you intend upon acquisition to hold it for productive use in a business or trade for investment, some intangibles are not like-kind to a fee simple interest. For instance, to be deemed a leasehold estate may or not be perpetual and may not have renewal provisions allowing it to run for 30 years or more. However, a lease with a term of less than 30 years is not like-kind to a fee interest. This is just one example, but it tends to highlight why having an experienced and knowledgeable Qualified Intermediary and good tax advisors is a necessity when real property intangibles are implicated in a 1031 Exchange.</p>

<h2>The Conservation Easement</h2>

<p>Conservation easements are generally used to regulate development of land while, in some instances, allowing for production of the goods and services that traditionally flow from the land. A conservation easement is a voluntary negotiated agreement between seller and buyer. Conservation easement buyers are often government agencies or non-profit conservation organizations. In general, easements permanently restrict and limit the use of the property in a particular manner, the terms of which are laid out in the easement agreement itself. Conservation easements maintain the original private use and ownership with the added value of preservation and stewardship of certain characteristics of the land under the easement.</p>

<p>Under the regulations, when the length of the easement runs perpetually, continuing without a defined intermission or interval, then the easement interest is like-kind to a fee simple interest in replacement property. Generally, unless the easement agreement defines a certain time, easements are presumed by most courts to run perpetually. In the event the easement isn’t perpetual, certain legal authorities, outside the regulations, suggest that, to be viewed as like kind to a fee ownership in land for 1031 exchange purposes, the easement should be treated similarly to a lease running 30 years or more.</p>

<p>Importantly, the conservation easement seller not only retains the fee simple interest in the underlying property, but also has the added tax deferral benefit of a 1031 Exchange by using the proceeds derived from the sale and reinvesting into other replacement property. Other examples of perpetual easement interests qualifying for a 1031 Exchange are: drainage easements, utility easements, and pipeline easements to name a few.</p>

<h2>The Leasehold Estate</h2>

<p>Generally, as mentioned above, in order for the sale of a leasehold interest to qualify for Section 1031 tax deferral, the term of the lease must be for a term of more than 30 years or, by its terms, be capable of being extended for a term of more than 30 years. Ideally, the taxpayer needs control over the option to renew the lease for up to 30 years or more. Aircraft hangar leases are an excellent example of the issues in a 1031 Exchange of a leasehold estate. Often a 1031 Exchange of a short-term lease (less than 30 years) for another short-term lease of similar length (i.e. hangar-to-hangar) is acceptable because it is like-kind real property, just not like kind to fee ownership. The roadblocks arise when a taxpayer wishes to complete a 1031 Exchange from a fee simple interest to a short-term hangar lease or vice-versa because those interests are generally not like-kind to one another.</p>

<p>Contact Accruit if you or a client are interested in pursuing a 1031 Exchange when a real property intangible is being bought or sold. Navigating the like-kind requirement is vital when discussing these real property intangibles and we are here to advise taxpayers and their tax advisors about their unique circumstances.</p>

<p><strong>Other Accruit blog articles discussing real property intangibles may be founds here:</strong></p>

<p><a href="/blog/renewable-energy-1031-exchanges-wind-farms-and-turbines" title="Wind and Solar Farms qualify for 1031 Exchange treatment">Wind and Solar Farms</a></p>

<p><a href="/blog/cell-tower-billboard-1031-exchanges" title="1031 Exchanges for Billboard Sites ">Billboard Sites</a>&nbsp;</p>

<p><a href="/blog/tax-deferred-exchanges-cell-towers" title="1031 Exchange for Cell Tower Sites">Cell Tower Sites</a></p>

<p>Now that we rang in the New Year, it’s time to start thinking about Tax Day 2023. Below is a breakdown and general timing for everything you need to know about your 2022 tax deadlines for the 2023 calendar year.</p>

<p>As a reminder, and pertaining to all tax return deadlines noted below, if you started a 1031 exchange in 2022, but your 180-day exchange period ends after your tax return deadline noted below, you will need to file an extension in order to receive the full 180-day exchange period. If you do not file an extension, your 1031 exchange deadline becomes the date your tax return is due.<br />
<br />
<em>Note, if you use a fiscal year, you will need to change some dates, visit the <a href="https://www.irs.gov/pub/irs-dft/p509--dft.pdf&quot; title="IRS Website 2023 Tax Dates">IRS Website</a> for more information.</em></p>

<h2><br />
January</h2>

<ul>
<li>Employers generate and provide all employees with copies of their Form W-2, Form 1099s, etc. no later than January 31, 2023.<br />
&nbsp;</li>
<li>Accounting and Treasury departments close out the previous year.<br />
&nbsp;</li>
<li>January 17, 2023: Individuals that didn’t pay income tax for 2022 through withholding, or didn’t pay enough tax, should make a payment of the estimated tax at this time; OR<br />
&nbsp;</li>
<li>January 31, 2023: Individuals, can file their 2022 tax return and pay all taxes due to prevent any penalty for late payments.</li>
</ul>

<h2><br />
March</h2>

<ul>
<li>March 1, 2023: Farmers, Ranchers, and Fishermen, should file their 2022 income tax return (Form 1040 or 1040-SR) and pay all tax due. If you paid your 2022 estimated tax by January 17, 2023, you can wait to file your return until April 18, 2023.<br />
&nbsp;</li>
<li>March 15, 2023: Partnerships and S corporations, must file a 2022 calendar year return (Form 1065) and provide each partnership with a copy of their Schedule K-1 (Form 1065) and if applicable Scheduled K-3. If needed, file Form 7004 for an automatic 6-month extension to file the return.<br />
&nbsp;</li>
<li><strong>If a 1031 exchange was completed, the taxpayer must submit a Form 8824 along with the 2022 tax return.</strong><br />
&nbsp;</li>
<li><strong>If a 1031 exchange was started in 2022, but not completed until 2023 (by your tax return deadline), you must file a Form 6252 to provide the IRS with information related to their receipt of the 1099 showing the sale of Relinquished Property in 2022. In other words, without further tax filing, the Service would be expecting that tax reporting related to the 1099 to be done in 2022.</strong><br />
&nbsp;</li>
<li><strong>If a 1031 exchange was started in 2021, but completed, or failed, in 2022 the default reporting is to report the exchange transaction in the 2nd year (2022). However, if you have losses in the 1st year (2021), you can elect to treat the exchange as though it took place in 1st year. </strong></li>
</ul>

<h2><br />
April</h2>

<ul>
<li>April 18, 2023: Individuals, living and working in the US, must file their 2022 tax return, Form 1040 or 1040-SR and pay any tax due. If you want an automatic 6-month extension, file a Form 4868, and pay what you estimate you will owe to avoid any penalties and interest.<br />
&nbsp;</li>
<li>April 18, 2023: Corporations, must file a 2022 calendar year income tax return (Form 1120) and pay any tax due. To file an automatic 6-month extension file Form 7004 and deposit what you estimate you owe in taxes to avoid any penalties and interest.<br />
<strong>&nbsp;</strong></li>
<li><strong>If a 1031 exchange was completed, the taxpayer must submit a Form 8824 along with the 2022 tax return.</strong><br />
&nbsp;</li>
<li><strong>If a 1031 exchange was started in 2022, but not completed until 2023 (by your tax return deadline), you must file a Form 6252 to provide the IRS with information related to their receipt of the 1099 showing the sale of Relinquished Property in 2022. In other words, without further tax filing, the Service would be expecting that tax reporting related to the 1099 to be done in 2022.</strong><br />
&nbsp;</li>
<li><strong>If a 1031 exchange was started in 2021, but completed, or failed, in 2022 the default reporting is to report the exchange transaction in the 2nd year (2022). However, if you have losses in the 1st year (2021), you can elect to treat the exchange as though it took place in 1st year.</strong></li>
</ul>

<h2><br />
June</h2>

<ul>
<li>June 15, 2023: Individuals, US citizens or residents living and working outside the United States and Puerto Rico, must file their 2022 tax return, Form 1040 or Form 1040-SR and pay any tax, interest, and penalties due. For an extension, file Form 4868 to obtain 4 additional months to file your return, but pay the estimated taxes owed to avoid penalties and interest.<br />
&nbsp;</li>
<li><strong>If a 1031 exchange was completed, the taxpayer must submit a Form 8824 along with the 2022 tax return.</strong></li>
</ul>

<h2><br />
September</h2>

<ul>
<li>September 15, 2023: Partnerships and S corporations, if you requested a timely 6-month extension back on March 15, 2023, you must now file your 2022 calendar year return, Form 1065, and pay any difference in tax owed from the payment you made back in March.<br />
&nbsp;</li>
<li><strong>If a 1031 exchange was completed, the entity must submit a Form 8824 along with the 2022 tax return. </strong><br />
&nbsp;</li>
<li><strong>If a 1031 exchange was started in 2022, but not completed until 2023 (by your tax return deadline), you must file a Form 6252 to provide the IRS with information related to their receipt of the 1099 showing the sale of Relinquished Property in 2022. In other words, without further tax filing, the Service would be expecting that tax reporting related to the 1099 to be done in 2022.</strong><br />
&nbsp;</li>
<li><strong>If a 1031 exchange was started in 2021, but completed, or failed, in 2022 the default reporting is to report the exchange transaction in the 2nd year (2022). However, if you have losses in the 1st year (2021), you can elect to treat the exchange as though it took place in 1st year.</strong></li>
</ul>

<h2><br />
October</h2>

<ul>
<li>October 16, 2023: Corporations, if you filed an extension back in April, you must now file your 2022 calendar.<br />
&nbsp;</li>
<li><strong>If a 1031 exchange was completed, the entity must submit a Form 8824 along with the 2022 tax return.</strong><br />
&nbsp;</li>
<li><strong>If a 1031 exchange was started in 2022, but not completed until 2023 (by your tax return deadline), you must file a Form 6252 to provide the IRS with information related to their receipt of the 1099 showing the sale of Relinquished Property in 2022. In other words, without further tax filing, the Service would be expecting that tax reporting related to the 1099 to be done in 2022.</strong><br />
&nbsp;</li>
<li><strong>If a 1031 exchange was started in 2021, but completed, or failed, in 2022 the default reporting is to report the exchange transaction in the 2nd year (2022). However, if you have losses in the 1st year (2021), you can elect to treat the exchange as though it took place in 1st year.</strong></li>
</ul>

<p><br />
For a more detailed breakdown of all tax items over the calendar year, please visit the <a href="https://www.irs.gov/pub/irs-dft/p509--dft.pdf&quot; title="IRS Website Tax Dates for 2023">IRS Website</a>.<br />
<br />
If you need more information on the above, or have specific questions in regard to your 2022 taxes you should consult with your CPA or tax advisor.</p>

<p><br />
<br />
<em>Source:&nbsp;https://www.irs.gov/pub/irs-dft/p509--dft.pdf&nbsp;</em></p&gt;

<p>We could not be more proud of what our team at Accruit was able to accomplish over 2022, below is small glimpse at what 2022 held for us. We'd like to thank all of our industry colleagues and referral partners for their continued support as we strive to #Revolutionize1031!&nbsp;</p>

<p>&nbsp;</p>

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<p>As with most service industries, not all Qualified Intermediaries (QIs) are created equal, nor do all QIs service their clients with the same standards and expectations in place. Below is a list of criteria you should evaluate prior to selecting a Qualified Intermediary to facilitate your 1031 exchange.</p>

<ol>
<li><strong>Bigger Isn’t Always Better</strong><br />
It is easy to assume that the largest company might be the best option, but that is seldom the case. We estimate that roughly 30% of the Live Chats we received through our website are from individuals and tax advisors&nbsp;that have a 1031 exchange open with a different QI but are unable to get in touch with them to answer their time sensitive questions in relation to their 1031 exchange, and so they reach out to us.<br />
&nbsp;</li>
<li><strong>Easy Accessibility</strong><br />
Today’s consumer wants accessibility at their fingertips, and with today’s technology why shouldn’t they get it? When evaluating QI options, pay special attention to how easily you will be able to contact them in the future.<br />
&nbsp;
<ul>
<li>Do they have a (800) number? Does a real person answer the call without you having to push several buttons to navigate an automated system? Will you have the ability to speak with an attorney, Certified Exchange Specialist®, or other subject matter expert regarding thorny situations?<br />
&nbsp;</li>
<li>Do they have a live chat on their website, with a real specialist on the other end available to quickly answer your questions?<br />
&nbsp;</li>
</ul>
</li>
<li><strong>QI Roster</strong><br />
A QI is only as good as its employees. When researching your QI options, look into the breakdown of their internal team.<br />
&nbsp;
<ul>
<li>Do they have on-staff attorneys specializing in 1031 Exchanges? Not all 1031 exchanges are cut and dry; some have complex aspects and nuances that require a specialized 1031 exchange attorney to ensure validity regarding IRC 1031. If the QI doesn’t have on-staff attorneys, you can expect delays and sometimes increased fees to bring in outside council.<br />
&nbsp;</li>
<li>What is their largest department? If it is not the Service department, then you might infer service isn’t their priority. A QI set-up with an adequate service and processing team will be set-up for successfully processing 1031 exchanges.<br />
&nbsp;</li>
</ul>
</li>
<li><strong>You Get What You Pay For</strong><br />
As with most things, when it comes to a 1031 exchange, you get what you pay for. Pricing is often reflective of the level of personal attention you will receive throughout the process. Companies that offer the lowest price do so by offering minimal touchpoints with their clients, and often minimal experience among their staff. Their goal is quantity, not quality. Similarly, companies that offer flat-rate pricing are not considering the unique aspects that accompany most 1031 Exchanges. 1031 Exchanges are not one size fits all and therefore a flat-rate pricing model doesn’t work.</li>
</ol>

<p>If you are looking to start a 1031 Exchange, we encourage you to reach out to various QIs and then evaluate their overall service offerings. Ask yourself the following questions of each QI: Were they easy to get ahold of via phone, live chat, email? Did they offer 1031 Exchange information and answers without charge? Do they have sufficient expertise and servicing team members?</p>

<p>At Accruit, we pride ourselves on providing the world class customer service with a consistent Net Promoter Score of over 80; we have received over 200 5-star Google reviews from our valued clients; and perhaps most telling, over 93% of our clients are repeat customers or direct referrals from other companies within the real estate industry. Additionally, Accruit has five on-staff attorneys that are 1031 exchange subject matter experts boosting over 100 years collective experience.</p>

<p>If you have any questions or would like more information on our 1031 Exchange services, please reach out to us today!</p>

<p>In certain states there is a mandatory tax withholding for nonresident individuals or businesses on the sale of real property. In performing a 1031 exchange you may be provided an exemption if executed properly. In the following section you will find a brief synopsis of the state withholding requirements. It is always important to consult your tax advisor before moving forward with a 1031 exchange. Failing to consult the correct professional advisors early could result in unnecessary taxes.</p>

<h3>ALABAMA</h3>

<ul>
<li><strong>Withholding: </strong>3% of the sales price for individuals; 4% of the sales price for business entities.</li>
<li><strong>Exemption:</strong> Submit form NR-AF3 (“Seller’s Certificate of Exemption”)</li>
<li><a href="https://revenue.alabama.gov/individual-corporate/taxes-administered-by-…; target="_blank">Further Information</a></li>
</ul>

<h3>CALIFORNIA</h3>

<ul>
<li><strong>Withholding:</strong> 3.33% of the sales price if the property is over $100,000.</li>
<li><strong>Exemption:</strong> Submit Form 593-C and certify as part of a 1031 exchange. Non-resident sellers seeking an exemption must submit Form 593-W to the California Franchise Tax Board.</li>
<li><a href="http://www.ftsb.ca.gov&quot; target="_blank">Further Information</a></li>
</ul>

<h3>COLORADO</h3>

<ul>
<li><strong>Withholding:</strong> 2% of the sales price if the property is over $100,000.</li>
<li><strong>Exemption:</strong> In a 1031 exchange, the non-Colorado resident may sign an “Affirmation of No Reasonably Estimated Tax to be Due” per Colorado Department of Revenue Form DR1083.</li>
<li><a href="http://www.colorado.gov/revenue/tax&quot; target="_blank">Further Information</a></li>
</ul>

<h3>GEORGIA</h3>

<ul>
<li><strong>Withholding:</strong> 3% of the sales price if the property is over $20,000.</li>
<li><strong>Exemption:</strong> Sellers performing a 1031 exchange and acquiring replacement property in Georgia are exempt and must submit Form IT-AFF3. Nonresident sellers purchasing replacement property out of Georgia are not exempt.</li>
<li><a href="http://www.etax.dor.ga.gov/inctax/withholding_tax_forms.aspx&quot; target="_blank">Further Information</a></li>
</ul>

<h3>HAWAII</h3>

<ul>
<li><strong>Withholding:</strong> 5% of the sales price under the Hawaii Real Property Tax Act.</li>
<li><strong>Exemption:</strong> Completion of Form N-289 stating the seller is performing a 1031 exchange.</li>
<li><a href="http://www.hawaii.gov/tax&quot; target="_blank">Further Information</a></li>
</ul>

<h3>MAINE</h3>

<ul>
<li><strong>Withholding: </strong>2.5% of the sales price if the property sold is over $50,000.</li>
<li><strong>Exemption:</strong> Submitting Form REW-5 at least two weeks prior to closing.</li>
<li><a href="http://www.maine.gov/revenueforms&quot; target="_blank">Further Information</a></li>
</ul>

<h3>MARYLAND</h3>

<ul>
<li><strong>Withholding:</strong> 7.5% by nonresident individual and 8.25% by nonresident entity.</li>
<li><strong>Exemption:</strong> Submit Form MW506AE at least 21 days prior to closing to the Maryland Comptroller’s Office if there is no boot. The state of Maryland also requires a letter from the qualified intermediary stating the amount of boot.</li>
<li><a href="http://www.marylandtaxes.com/&quot; target="_blank">Further Information</a></li>
</ul>

<h3>MISSISSIPPI</h3>

<ul>
<li><strong>Withholding: </strong>5% of the sales price if the property sold is over $100,000.</li>
<li><strong>Exemption:</strong> If the seller is performing an exchange, they may provide the buyer with an affidavit stating no gain is to be recognized on the sale because they are performing an exchange and purchasing replacement property in Mississippi.</li>
<li><a href="http://www.dor.ms.gov&quot; target="_blank">Further Information</a></li>
</ul>

<h3>NEW JERSEY</h3>

<ul>
<li><strong>Withholding:</strong> The buyer must file Form C-9000 with the Division of Taxation at least 10 days before closing. Within 10 days, the Division will forward a notice of the amount to be held in escrow at the closing including existing tax debts, delinquencies, assessments and tax on gain from the sale of property.</li>
<li><strong>Exemption: </strong>The seller may file an Asset Transfer Tax Declaration form to assist the Division in calculating the estimated tax on the gain. The Division has the discretion to adjust the escrow amount held. Payment of the taxes is made from the escrow account.</li>
<li><a href="http://www.state.nj.us/treasury/taxation/faqbulksale.shtml&quot; target="_blank">Further Information</a></li>
</ul>

<h3>NEW YORK</h3>

<ul>
<li><strong>Withholding:</strong> 7.7% of the capital gain.</li>
<li><strong>Exemption:</strong> Submit Form IT-2663 and providing a brief summary of the exchange before closing with the New York State Department of Taxation and Revenue.</li>
<li><a href="http://www.tax.ny.gov/forms&quot; target="_blank">Further Information</a></li>
</ul>

<h3>NORTH CAROLINA</h3>

<ul>
<li><strong>Withholding:</strong> 4% of the sales price. The buyer must file a return with the Secretary of the State of North Carolina within 15 days of the sale closing.</li>
<li><strong>Further Information:</strong> NC Tax Code, Section 105-163</li>
</ul>

<h3>OREGON</h3>

<ul>
<li><strong>Withholding:</strong> The lesser of 4% of the consideration or 8% of the gain or proceeds for individuals and C Corporations.</li>
<li><strong>Exemption:</strong> Submit Form WC exemption form.</li>
<li><a href="https://www.oregonlaws.org/ors/314.258&quot; target="_blank">Further Information</a></li>
</ul>

<h3>PENNSYLVANIA</h3>

<ul>
<li><strong>Historically: </strong>Pennsylvania did not recognize the Federal 1031 exchange gain deferral rules and state income taxes must be paid when there is gain on the sale of Pennsylvania property, or for Pennsylvania taxpayer selling out of state property.</li>
<li><strong>Update:</strong>&nbsp;On July 8th, 2022, House Bill 1342 was signed into law stating, effective with the 2023 tax year, Pennsylvania will join the rest of the states in recognizing Section 1031 exchange deferrals for state tax purposes. There is no withholding.</li>
</ul>

<h3>RHODE ISLAND</h3>

<ul>
<li><strong>Withholding:</strong> 6% of the sales price for nonresident individuals and 9% for nonresident corporations.</li>
<li><strong>Exemption:</strong> Submit RI Form 71.3 stating the sale is exempt due to 1031 exchange.</li>
<li><a href="http://www.tax.ri.gov&quot; target="_blank">Further Information</a></li>
</ul>

<h3>SOUTH CAROLINA</h3>

<ul>
<li><strong>Withholding:</strong> 7% for individuals and 5% for corporations.</li>
<li><strong>Exemption:</strong> Completion of Form I-295.</li>
<li><a href="http://www.sctax.org/default.htm&quot; target="_blank">Further Information</a></li>
</ul>

<h3>VERMONT</h3>

<ul>
<li><strong>Withholding:</strong> 2.5% of the sales price.</li>
<li><strong>Exemption:</strong> A nonresident seller can request an exemption for performing a 1031 exchange by filing a request for Withholding Certificate and presenting this Certificate to the buyer prior to closing. A separate tax, the Vermont Land Gains tax, exempts only exchanges of Vermont land for Vermont land.</li>
<li><a href="http://www.state.vt.us/tax/index.shtml&quot; target="_blank">Further Information</a></li>
</ul>

<h3>WEST VIRGINIA</h3>

<ul>
<li><strong>Withholding:</strong> 2.5% of the sale proceeds or estimated capital gain.</li>
<li><strong>Exemption:</strong> File Form WV.NRAE with the State Tax Department no later than 21 days before closing.</li>
<li><strong>Further Information:</strong> West Virginia Code 11-21-71b</li>
</ul>

<p>&nbsp;</p>

<p><strong>Information presented in this article should not be perceived as tax or legal advice. Please consult your attorney and tax advisor before proceeding with a 1031 exchange.</strong></p>

<p>&nbsp;</p>

<p>Updated 7/15/2022</p>