Many investors dream of exchanging U.S. real estate for a beachfront property in Puerto Rico—but is it allowed under Section 1031 of the Internal Revenue Code?

In our latest article, Legal 1031 General Counsel James T. Walther, Esq., LL.M. and Counsel Julia Mastrotto, Esq. unpack the complexities of using a 1031 exchange for real estate in foreign and U.S. territories, including whether real estate in Puerto Rico qualifies as “like-kind” with real estate in other jurisdictions.

Here’s what you’ll learn:

• Why Puerto Rico is not treated the same as other U.S. territories under Section 1031(h)
• The difference between U.S. real estate and international real estate for 1031 purposes
• How Congressional efforts have tried—and failed—to include Puerto Rico in 1031 eligibility
• Exceptions for involuntary conversions under Section 1033

Read the full article here.

Whether you’re planning to invest in a tropical getaway or just curious about the rules, this article is a must-read for real estate investors and advisors navigating cross-border transactions.

Legal 1031 does not provide tax or legal advice, nor can we make any representations or warranties regarding the tax consequences of any transaction. Taxpayers must consult their tax and/or legal advisors for this information. Unless otherwise expressly indicated, any perceived federal tax advice contained in this article/communication, including attachments and enclosures, is not intended or written to be used, and may not be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any tax-related matters addressed herein.
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