Exchanging CA properties for TX

General Real Estate Investing
1

We have a lot of California investors buying Texas properties, but someone mentioned that CA investors can be taxed on the gain when they later sell their TX property.

http://www.realestatejournal.com/columnists_com/buildingvalueqa/20031001-smith.html

“…things get more complicated when it involves an exchange with relinquished and replacement properties in different states, Mr. Weller points out. In Georgia, deferral of taxes on gains from a property sale is possible in a 1031 exchange only when the replacement property is located in Georgia. In California and Oregon, if in-state property is exchanged for out-of-state replacement property, a future sale of the replacement property can trigger an obligation to pay the state tax deferred on the original exchange.”

Is this true?

2

Absolutely.

3

learned something new…so what happens if you move out of Calif before you sell the replacement property???

do anybody else have references/links on this topic???

Interested to know more

4

I wasn’t able to find too much information myself. It seems as if you’re going to pay taxes on the original exchange if you trade a CA property for a property in another state and then later sell the property from the other state. Same for Oregon. In Georgia, it looks like you can’t even defer taxes if you exchange your GA property for one in another state.