Big Win for Pennsylvania A Real Estate Investors: PA Now Recognizes §1031 Exchanges

Effective January 1, 2023, Pennsylvania officially conforms its state tax code to federal IRC §1031 for individuals and partnerships.

This long-awaited change means that investors who complete a 1031 exchange can now defer both federal and state taxes on the gain from the sale of investment property—keeping more capital working in Pennsylvania.

This update follows federal tax treatment and eliminates the previous 3.07% state personal income tax hit on qualifying like-kind exchanges, helping real estate investors preserve equity, expand their reinvestment options, and reduce administrative burdens. It also improves the cost benefit for Pennsylvania taxpayers pursuing reverse and improvement exchanges.

Read the full article by James T. Walther, Esq., LL.M., General Counsel at Legal 1031 Exchange Services, LLC, to learn what this means for you and your clients.

Click here to read more.