or another way
A 1031 exchange lets you defer federal capital gains tax when you sell investment or business real estate and buy like-kind real estate. You must identify replacement property within 45 days and close within 180 days, through a qualified intermediary. Utah starts from federal income, so the deferral generally carries to your Utah return.
Start your 1031 property search
Selling an investment property, or already in your 45-day window? Call (801) 733-7446 or send us your timeline. Bring your QI's contact details and target price, and we'll start building your replacement-property list today.
Consult a qualified intermediary and a CPA or tax attorney before you sell. We're your real estate team, not your tax advisor.
A 1031 exchange, named for Section 1031 of the Internal Revenue Code, lets you postpone tax on the gain when you exchange real property held for business or investment for other real property of a like kind. The tax is deferred, not forgiven: your old basis carries into the new property.
Since the Tax Cuts and Jobs Act, §1031 applies only to real property. For exchanges completed after December 31, 2017, equipment, vehicles, furniture and other personal property no longer qualify. Your primary home and property held mainly for resale (such as fix-and-flips) don't qualify either. You report every exchange on IRS Form 8824 with your return for the year of the exchange.
Most investors do a deferred exchange: you sell first, then buy. Two clocks start the day your relinquished property transfers:
Identify your replacement property in a signed, written document and deliver it to the seller or your qualified intermediary. Telling your real estate agent, attorney or accountant doesn't count. Describe each property clearly (a street address or legal description). In most cases you may identify up to three properties of any value, or more if their total value is no more than 200% of what you sold.
You must receive the replacement property by day 180, or by the due date (with extensions) of your tax return for that year, whichever comes first.
The IRS says these limits can't be extended for any circumstance or hardship except presidentially declared disasters. Weekends and holidays count. In Utah's competitive markets, 45 days goes fast, so many investors start touring and writing offers before their sale closes.
In a deferred exchange you can't touch the sale proceeds. If you receive the money, or could have, the exchange can fail. A qualified intermediary (QI) is the independent party who holds the funds under a written exchange agreement and uses them to buy your replacement property.
Under IRS rules, your own agent can't be your QI. That includes anyone who has acted as your real estate agent or broker, attorney, accountant or employee in the past two years. Red Sign agents are not qualified intermediaries and never hold exchange funds. Choose a QI before you list. The IRS warns that some intermediaries have gone bankrupt, so ask how client funds are protected.
For real estate, "like-kind" is broad. The IRS says most real estate is like-kind to other real estate: a rental house can be exchanged for vacant land, a fourplex, a retail building or a short-term rental. Quality and grade don't matter. U.S. property is not like-kind to property outside the United States.
Boot is anything you receive that isn't like-kind property, such as cash left over at closing or personal property. Boot is generally taxable up to your gain. Replacing less value or less debt than you sold can also create taxable gain. Your CPA can confirm the exact numbers for your exchange.
Real estate anywhere in the U.S. can be like-kind. If you want to stay in Utah, here is how the four markets we're asked about most compare. All figures are from the U.S. Census Bureau (ACS 2020–2024 five-year estimates; population growth April 2020 to July 2025).
| Market | Median home value | Median gross rent | Population growth 2020–2025 |
|---|---|---|---|
| Utah County | $538,700 | $1,541 | +15.2% |
| Salt Lake County | $525,700 | $1,592 | +3.0% |
| St. George (city) | $496,100 | $1,545 | +14.0% |
| Park City (city) | $1,757,800 | $1,943 | +2.3% |
| Utah (statewide) | $489,400 | $1,496 | +8.2% |
Red Sign is based in Orem, and Utah County is our home market. It grew 15.2% from 2020 to 2025, nearly twice the statewide rate, and averages 3.39 people per household, the highest of these four markets. See our Orem, Provo, Lehi and American Fork guides.
It's Utah's most populous county, with 426,245 households, and has the highest median rent of the three non-resort markets above ($1,592). See Salt Lake City.
In Washington County, St. George grew 14.0% from 2020 to 2025, and its median home value ($496,100) is close to the state median. See St. George.
Its median value ($1,757,800) is more than three times Utah's. If you're considering a nightly rental, check the zoning first. Under Park City Municipal Code 4-5-3, every nightly rental needs a building inspection and a license, and the unit must be in a zone that allows nightly rentals. Several subdivisions prohibit them. See Park City.
Figures are the latest Census estimates, not current list prices. Ask us for current MLS data on any property type.
Tax law changes. Verify with the Utah State Tax Commission (tax.utah.gov) and your tax advisor before you rely on any figure here.
Your QI handles the money and your CPA handles the tax. We handle the property, which is usually the part that decides whether you hit day 45 and day 180.
we build a shortlist of Utah properties that fit your price, debt-replacement target and goals, so you can identify on day one instead of day 44.
we gather the addresses, legal descriptions and backup options your QI needs for a clean written identification.
we write contracts with closing dates and due-diligence periods that fit inside your 180 days, and coordinate with your QI and title company.
20 agents, Utah County to St. George to Park City, and selling your relinquished property too, if it's in Utah.
A rental or investment property being sold as the relinquished property: we can list and sell it if it's in Utah, and build a shortlist of Utah properties that fit the price, debt-replacement target and goals before the sale closes, so identification can happen on day one instead of day 44.
A sale that has already closed and a 45-day identification window that is running: we gather the addresses, legal descriptions and backup options a QI needs for a clean written identification, and write contracts with closing dates and due-diligence periods that fit inside 180 days.
Red Sign Real Estate Team (Keller Williams Westfield, Orem) was founded in 2008, has sold over 3,000 homes, and has 1,950+ five-star reviews. RealTrends Verified ranks us #4 among Utah mega teams and #1 in Orem (2025 sales).
Red Sign Real Estate Team and its agents are licensed real estate professionals, not tax advisors, attorneys, financial advisors or qualified intermediaries, and we do not hold or handle exchange funds. This page is general information as of October 12, 2026, not tax, legal or investment advice. Section 1031 rules are complex, and results depend on your facts. Before you sell, consult a qualified intermediary and a CPA or tax attorney about your situation.
Utah follows the federal rules. Both properties must be real property held for business or investment. You must identify replacement property in writing within 45 days of selling, and receive it within 180 days or by your return due date, if earlier. A qualified intermediary must hold the proceeds, and you report the exchange on IRS Form 8824.
Generally, yes. Utah's income tax starts from federal adjusted gross income, defined in Utah Code §59-10-103 by reference to the Internal Revenue Code in effect for that year. Gain deferred under §1031 federally is therefore generally deferred for Utah too; confirm with your CPA.
Utah taxes capital gains as ordinary income at a flat 4.45% for tax years beginning on or after January 1, 2026, under Utah Code §59-10-104 as amended by SB 60. Federal capital gains tax and other federal taxes are separate. A properly completed 1031 exchange defers both the federal and Utah tax on the gain.
If you miss the 45-day identification or 180-day closing deadline, or can't buy any identified property, the exchange generally fails, and the gain becomes taxable in the year of the sale. The IRS doesn't extend these deadlines except for presidentially declared disasters. Identifying backup properties and starting your search before you sell lowers the risk.
Yes, if you hold it as a rental or investment. A rental house can be exchanged for other real property, such as land, a duplex or commercial property. Your primary residence doesn't qualify for §1031, though a separate home-sale exclusion may apply. Homes bought mainly to fix and resell are held for sale and don't qualify.
Exchanges between related parties generally require both parties to hold the properties for at least two years; ask your QI or CPA. This is the related-party rule in IRC §1031(f).
It can if it's held for investment. Under the IRS safe harbor in Revenue Procedure 2008-16, you own it at least 24 months. In each of the two 12-month periods, you rent it at fair rent for 14 days or more, and your personal use is no more than 14 days or 10% of the rented days, whichever is greater.
In some areas. Park City Municipal Code 4-5-3 requires every nightly rental to pass a building department inspection and get a license before it's offered for rent, and the unit must be in a zone that allows nightly rentals. Several Park City subdivisions prohibit them. Check zoning and HOA rules before you identify a Park City property.
No. IRS guidance says anyone who has acted as your real estate agent or broker, attorney, accountant or employee in the past two years can't be your qualified intermediary. Red Sign agents help you find, negotiate and close replacement property, but we never hold exchange funds. Choose an independent QI before your sale closes.
Yes. In Revenue Ruling 2004-86, the IRS ruled that an interest in a properly structured Delaware Statutory Trust can be treated as an interest in real property for §1031. DSTs are passive, sold as securities, and carry their own fees and risks. Review any offering with a licensed securities professional and your CPA.
You buy the replacement property before selling. An exchange accommodation titleholder holds title to one of the properties, typically for no more than 180 days, while you sell the relinquished property, under Revenue Procedure 2000-37. Reverse exchanges cost more and usually need cash or financing up front, so set one up with your QI early.
It's an exception to the identification limits. If you identify more than three properties and exceed 200% of the value you sold, the identification can still be valid if you actually acquire at least 95% of the total fair market value of everything you identified, before the exchange period ends. In practice, it's a high bar.
Selling an investment property, or already in your 45-day window? Call (801) 733-7446 or send us your timeline. Bring your QI's contact details and target price, and we'll start building your replacement-property list today.
Red Sign Real Estate Team and its agents are licensed real estate professionals, not tax advisors, attorneys, financial advisors or qualified intermediaries, and we do not hold or handle exchange funds. This page is general information as of October 12, 2026, not tax, legal or investment advice. Section 1031 rules are complex, and results depend on your facts. Before you sell, consult a qualified intermediary and a CPA or tax attorney about your situation.