Can I 1031 exchange a property for one in another state?
Yes. U.S. real estate is like-kind to other U.S. real estate regardless of state, so you can sell in one state and buy your replacement in another. Watch out for state "clawback" rules, though: some states (California is the notable one) require you to keep reporting the deferred gain and will tax it when you eventually sell, even if you’ve moved the property out of state.
The federal exchange works the same across state lines. The complications are at the state level: withholding requirements at closing and clawback/reporting rules vary.
Only property within the United States qualifies — you can’t exchange U.S. property for foreign property (though foreign-for-foreign can work). Because state rules differ, loop in a CPA familiar with both states. See what qualifies as like-kind.
Learn the terms
Related questions
General education — not tax or legal advice. This explains how §1031 exchanges work in general terms and uses simplified assumptions. Rules and tax rates change and your situation is specific. Talk to a qualified CPA or tax attorney before you rely on any of it. See our full terms & legal notice.