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STATE TAXES
QI's are not permitted to give you legal, tax or investment advice
so you should consult your own advisers.
We also suggest the resources at:
Section 1031 deals with FEDERAL TAX on GAINS.
The IRS will tax gain on a SALE but recognizes NO TAXABLE GAIN on a QUALIFIED EXCHANGE.
But gains may also be subject to STATE TAX LAWS.
Several States have NO STATE INCOME TAX on gains.
Other States FOLLOW THE FEDERAL TAX CODE and don't tax the gain.
In a few States, it depends on whether the swapped properties are in the same State.
And, Pennsylvania does not recognize 1031 exchanges, so will charge income tax.
And, State Tax Rates vary from State-to-State.
Where State tax is payable, some States require
MANDATORY NON-RESIDENT WITHHOLDING of tax at closing.
But some of those States allow exemptions.
When TRADING BETWEEN STATES there may be "CLAW BACK" tax rules.
So, if you exchange California property for Florida property,
you'll owe a California tax if you later "Sell" the Florida property.
But 1031's WILL STILL SAVE YOU MONEY EVEN IN CALIFORNIA!
See the excellent Forbes article at:
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Links as a starting point for general State Tax Information follow:
However, always consult your Tax Advisor.
Alabama Department of Revenue
Requirements: N/A
Alaska Department of Revenue
http://www.revenue.state.ak.us/
Requirements: N/A
Arizona Department of Revenue
http://www.revenue.state.az.us/
Requirements: N/A
Arkansas Department of Finance and Administration
Requirements: N/A
California Franchise Tax Board
Requirements: 3.3% & Form 593C Pub 1016
Colorado Department of Revenue
http://www.revenue.state.co.us/main/home.asp
Requirements: 2% & Form 1083
Connecticut Department of Revenue Services
http://www.ct.gov/drs/site/default.asp
Requirements: N/A
Delaware Division of Revenue
http://www.state.de.us/revenue/
Requirements: N/A
Washington D.C. Office of Tax and Revenue
http://cfo.dc.gov/otr/site/default.asp
Requirements: N/A
Florida Department of Revenue
http://sun6.dms.state.fl.us/dor/
Requirements: N/A
Georgia Department of Revenue
Requirements: 3% & Form IT-AFF
Hawaii Department of Taxation
http://www.state.hi.us/tax/tax.html
Requirements: 5% & Form N 289
Idaho State Tax Commission
http://tax.idaho.gov/index.html
Requirements: N/A
Illinois Department of Revenue
http://www.revenue.state.il.us/
Requirements: N/A
Indiana Department of Revenue
Requirements: 1031 is not recognized unless true swap with simultaneous exchange. Full Indiana tax withheld.
Iowa Department of Revenue and Finance
http://www.state.ia.us/tax/index.html
Requirements: N/A
Kansas Department of Revenue
Requirements: N/A
Kentucky Revenue CabinetñOnline Taxpayer Service Center
Requirements: N/A
Louisiana Department of Revenue
Requirements: N/A
Maine Revenue Services
http://www.state.me.us/revenue/
Requirements: 2.5% & REW-5
Maryland Revenue Services
http://www.comp.state.md.us/default.asp
Requirements: 4.75% & Form MW506AE
Massachusetts
Requirements: N/A
Michigan Department of Treasury
http://www.michigan.gov/treasury
Requirements: N/A
Minnesota Department of Revenue
Requirements: N/A
Mississippi Tax Commission
Requirements: Over $100,000 required 5% withholding or net amount realized by seller, whichever is less.
Missouri Department of Revenue
http://www.dor.mo.gov/index.htm
Requirements: N/A
Montana Department of Revenue
http://www.discoveringmontana.com/revenue/default.asp
Requirements: N/A
Nebraska
http://www.revenue.state.ne.us/index.html
Requirements: N/A
Nevada Department of Taxation
Requirements: N/A
New Hampshire Department of Revenue Administration
http://www.state.nh.us/revenue/index.htm
Requirements: N/A
New Jersey Division of Taxation
http://www.state.nj.us/treasury/taxation/
Requirements: 8.97% of tax gain on house sold but collection shall not be less than 2% of the consideration & Form GIT/REP-1,4.
New Mexico Taxation and Revenue
Requirements: N/A
New York Department of Taxation & Finance
Requirements: Estimated Tax amount by owner & form IT-2663.
North Carolina Department of Revenue
Requirements: Completion of Form NC-1099NRS but no tax if performing a 1031 tax deferred exchange.
North Dakota State Tax Department
Requirements: N/A
Ohio Department of Taxation
Requirements: N/A
Oklahoma Tax Commission
Requirements: N/A
Oregon Department of Revenue
Requirements: 4% to 10% effective Jan. 1, 2008
Pennsylvania
http://www.revenue.state.pa.us/
Requirements: N/A
Rhode Island Division of Taxation
Requirements: 6% of sales price or total gain for individuals, estates, partnerships or trusts and 9% for nonresident corporations unless the nonresident seller makes gain election and files RI form 71.3.
South Carolina Department of Revenue
Requirements: 5% for corporations, 7% for individuals. Exemption through Form I-295.
South Dakota
http://www.state.sd.us/drr2/Revenue.html
Requirements: N/A
Tennessee
http://www.state.tn.us/revenue/
Requirements: N/A
Texas, Window on State Government iñ Texas Taxes
http://www.window.state.tx.us/m23taxes.html
Requirements: N/A
Utah State Tax Commission
Requirements: N/A
Vermont Department of Taxes
Requirements: 2.5% Form RW-171
Virginia Department of Taxation
Requirements: N/A
Washington Department of Revenue
Requirements: 1.7% excise tax upon sale.
West Virginia Department of Revenue
Requirements: N/A
Wisconsin Department of Revenue
Requirements: N/A
Wyoming Department of Revenue
Requirements: N/A
The 1031 Exchange Center LLC is an IRS Qualified Intermediary that is not permitted to give legal or tax advice. Please consult with your legal or tax advisors concerning your specific case. But for a complimentary confidential evaluation, please click the button below.