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Does 1031 Espouse Property Held With Spouses?
Are you the joint owner of a piece of property with your spouse? Do you wish to sell the property in question and take advantage of deferring your taxes by conducting a 1031 exchange? In this case, the replacement property will also have to be purchased the same way, that is, as community or entirety property.
If only one of you takes title to the replacement property, the other is liable for tax on 50 percent of the capital gains accrued in the sale of the relinquished property.
If your relinquished property is held separately by one of you, you will have to buy the replacement property separately. But you have the option of gifting 50 percent of the purchased property to your spouse after a certain period of time, usually a year or so later. The gift is not liable for taxation.
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