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Roger, Attorney
Category: Legal
Satisfied Customers: 31731
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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I am selling my Allstate Agency and buying another one. My

Resolved Question:

I am selling my Allstate Agency and buying another one. My Agency is incorporated so if I sell the business to the buyer and structure the contract so the assets are a stock transaction, is the sale qualified as a 1031 exchange
Submitted: 6 years ago.
Category: Legal
Expert:  Roger replied 6 years ago.

Hi - my name is XXXXX XXXXX I'm a litigation attorney here to assist you.


Certain property is ineligible as exchange property under Section 1031. Examples of ineligible exchange property include:


a) stock in trade, inventory or other property held primarily for sale

b) stocks, bonds or notes

c) an interest in a partnership

d) a personal residence

e) a vacation or second home that is used by the taxpayer or his family for more than two weeks out of the year, or 10% of the actual number of days the property has been rented in a given year.


Thus, your transfer would not be eligible for a 1031 exchange. Here's a link to the law: (see section 2).

Customer: replied 6 years ago.
if the sale is structured as client files,goodwill and fixed assets, would any part of the sale qualify for a1031 exchange
Expert:  Roger replied 6 years ago.
Even though you're making a "like-kind" transfer, it is not going to qualify in this instance because the things you are transferring are excluded from the program. I don't see a way that you can make a tax free transaction out of this.
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