--- title: Do Vehicles Qualify for a 1031 Exchange? description: Do vehicles still qualify for a 1031 exchange? That’s what this article will discuss. image: https://www.realized1031.com/hubfs/car-845452240.jpg --- [![Realized 1031 Exchange Marketplace](https://www.realized1031.com/hs-fs/hubfs/Images/Brand/Logo/Realized/Realized-Logo-Black.png?width=240&height=80&name=Realized-Logo-Black.png "Realized 1031 Logo") ](https://www.realized1031.com/) - [Wealth Management Gap](https://www.realized1031.com/the-wealth-management-gap) - [Our Process](https://www.realized1031.com/how-realized-works) - [Financial Advisors](https://www.realized1031.com/advisor) - [Resources](https://www.realized1031.com/resources) - [The Company](https://www.realized1031.com/about-us) - [Articles](https://www.realized1031.com/blog) [Register](https://www.realized1031.com/marketplace) [Log In](https://www.realized1031.com/login) - Better Business Bureau Rating: **A+** - [FINRA BrokerCheck](https://brokercheck.finra.org/firm/summary/22333) - [Call](tel:1-877-797-1031) **(877) 797-1031** # Do Vehicles Qualify for a 1031 Exchange? Posted Aug 22, 2022 ![car-845452240](https://www.realized1031.com/hs-fs/hubfs/car-845452240.jpg?width=750&height=392&name=car-845452240.jpg) The tax code seems to be constantly changing, and that applies to the rules regarding 1031 exchanges too. Do vehicles still qualify for a 1031 exchange? That’s what this article will discuss.   ### What Is a 1031 Exchange? A 1031 exchange is a tool used by real estate investors that allows them to swap one investment property for another and defer capital gains or losses or capital gains taxes that would otherwise apply at the time of sale. Sometimes a 1031 exchange is also called a Starker exchange or like-kind exchange. Section 1031 can apply to property beyond real estate.   ### How a 1031 Exchange Works A seller can delay capital gains taxes by selling a property and putting the money towards a property similar in nature and value. This is the process:  Identify the property you want to sell and buy.  Choose a qualified intermediary, known as an exchange facilitator. The intermediary holds the funds in escrow until the exchange is completed.   Notify the IRS of the transaction via [Form 8824](https://www.realized1031.com/blog/form-8824-section-iii-explanation) with your tax return. On the form, you’ll detail the properties, the timeline of the transactions, who was involved in the process, and the money involved.   Relinquish the property.  Buy the replacement property.  ### Vehicles and 1031 Exchanges  As of January 1, 2018, under the [2017 Tax Cuts and Jobs Act ](https://www.realized1031.com/glossary/tax-cuts-and-jobs-act)(TCJA), exchanges of personal or intangible property like machinery, equipment, artwork, collectibles, patents, and other intellectual property, and yes, vehicles generally no longer qualify for nonrecognition of gain or loss as 1031 exchanges. Those exchanges now result in taxable gain or loss in the year of the exchange.   There is a bit of a silver lining, though. The TCJA includes depreciation provisions that help counter the loss of the 1031 exchange benefits, and some of the provisions are specific to vehicles. In some cases, the provisions will give you a better year-one tax savings on vehicles than you would have received with a 1031 exchange.   The TCJA increased the level of bonus depreciation percentage from 50% to 100% for qualified property acquired and placed into service after September 27, 2017, and before January 1, 2023. Before the TCJA, used property wasn’t eligible for bonus depreciation. But after September 27, 2017, property acquired in used condition but of first use to the taxpayer generally qualifies for 100% bonus depreciation.   TCJA also increased the depreciation limits for passenger vehicles placed into service after December 31, 2017. A passenger vehicle includes any four-wheeled vehicle made for primary use on public streets, roads, and highways that has an unloaded gross vehicle rating of 6,000 pounds or less.   So no, vehicles no longer qualify for a 1031 exchange but the depreciation limits for them have been increased.   This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. Realized does not provide tax or legal advice. This material is not a substitute for seeking the advice of a qualified professional for your individual situation. Costs associated with a 1031 transaction may impact investor’s returns and may outweigh the tax benefits. The depreciation schedule for any investment property may affect the property owner’s income bracket and/or tax status. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities. Download The Guide To 1031 Exchange [![The 1031 Investor's Guidebook](https://www.realized1031.com/hs-fs/hubfs/Images/UI/graphics/composites/1031-Exchange-eBook-250.png?width=250&height=250&name=1031-Exchange-eBook-250.png "Tackle the art and science of ...") ](https://www.realized1031.com/blog/do-vehicles-qualify-for-a-1031-exchange#blogform) Download eBook ---   --- ### The 1031 Investor's Guidebook ![Download The Guide To 1031 Exchange](https://www.realized1031.com/hs-fs/hubfs/Images/UI/graphics/composites/1031-Exchange-eBook-550.jpg?width=550&height=650&name=1031-Exchange-eBook-550.jpg) Tackle the art and science of completing your 1031 exchange. By providing your email and phone number, you are opting to receive communications from Realized. If you receive a text message and choose to stop receiving further messages, reply STOP to immediately unsubscribe. Msg & Data rates may apply. To manage receiving emails from Realized visit the Manage Preferences link in any email received. Search ### [Why Realized](https://www.realized1031.com/why-realized) - [Wealth Management](https://www.realized1031.com/the-wealth-management-gap) - [Why Realized](https://www.realized1031.com/why-realized) - [Our Process](https://www.realized1031.com/how-realized-works) - [Scenarios](https://www.realized1031.com/scenarios) - [Private Client Program](https://www.realized1031.com/private-client) - [Realized Exchange Services](https://www.realized1031.com/realized-exchange-services) ### [The Company](https://www.realized1031.com/about-us) - [The Team](https://www.realized1031.com/about-us) - [FAQ](https://www.realized1031.com/frequently-asked-questions) - [Testimonials](https://www.realized1031.com/testimonials) - [Press](https://www.realized1031.com/press) - [Careers](https://www.realized1031.com/careers) ### [Partners](https://www.realized1031.com/partners) - [Financial Advisors](https://www.realized1031.com/advisor) - [Broker Dealers](https://www.realized1031.com/partners/broker-dealers) - [Real Estate Agents](https://www.realized1031.com/partners/real-estate-agents) - [Certified Public Accountants](https://www.realized1031.com/partners/certified-public-accountants) ### [Resources](https://www.realized1031.com/resources) - #### Learn - [Articles](https://www.realized1031.com/blog) - [Glossary of Terms](https://www.realized1031.com/glossary) - [Capital Gains Tax Rates](https://www.realized1031.com/capital-gains-tax-rate) - #### Watch - [Video Library](https://www.realized1031.com/videos) - [Webinar Archive](https://www.realized1031.com/webinars) - #### Read - [Delaware Statutory Trust](https://www.realized1031.com/delaware-statutory-trust) - [Tenants-In-Common](https://www.realized1031.com/tenants-in-common-tic) - [1031 Exchange](https://www.realized1031.com/1031-exchange) - [Qualified Intermediary](https://www.realized1031.com/qualified-intermediary) - [Qualified Opportunity Zones](https://www.realized1031.com/opportunity-zones) #### Realized - 500 W 13th Street Austin, TX 78701 - (877) 797-1031 ##### [Contact Us](https://www.realized1031.com/contact-us) - [![Realized on Facebook](https://www.realized1031.com/hs-fs/hubfs/Images/UI/Social/Icons/Mix/social-facebook-whiterev.png?width=60&height=60&name=social-facebook-whiterev.png)](https://www.facebook.com/Realized/) - [![Realized on LinkedIn](https://www.realized1031.com/hs-fs/hubfs/Images/UI/Social/Icons/Mix/social-linkedin-whiterev.png?width=60&height=60&name=social-linkedin-whiterev.png)](https://www.linkedin.com/company/realized/) - [![Realized on YouTube](https://www.realized1031.com/hs-fs/hubfs/Images/UI/Social/Icons/Mix/social-youtube-whiterev.png?width=60&height=60&name=social-youtube-whiterev.png)](https://www.youtube.com/c/Realized1031?sub_confirmation=1) - [![Realized Holdings, Inc. BBB Business Review](https://www.realized1031.com/hs-fs/hubfs/Images/professional-assoc/bbb/RZH2-bbb-seal.png?width=40&height=65&name=RZH2-bbb-seal.png)](http://www.bbb.org/central-texas/business-reviews/real-estate-investors/realized-holdings-llc-in-austin-tx-1000112948/#bbbonlineclick) - [![FEA Logo](https://www.realized1031.com/hs-fs/hubfs/Images/professional-assoc/fea/RZH2-fea-logo.png?width=82&height=65&name=RZH2-fea-logo.png "FEA Logo")](https://www.1031.org) SECURITIES DISCLOSURE Realized1031.com is a website operated by Realized Technologies, LLC, a wholly owned subsidiary of Realized Holdings, Inc. (“Realized Holdings”). Securities and/or Investment Advisory Services may be offered through Registered Representatives or Investment Advisor Representatives of Realized Financial, Inc. ("Realized"), a broker/dealer, member [FINRA](https://www.finra.org)/[SIPC](https://www.sipc.org/), and registered investment adviser. Realized is a subsidiary of Realized Holdings, Inc. ("Realized Holdings"). Check the background of this firm on [FINRA's BrokerCheck](https://brokercheck.finra.org/firm/summary/22333). Hypothetical example(s) are for illustrative purposes only and are not intended to represent the past or future performance of any specific investment. Investing in alternative assets involves higher risks than traditional investments and is suitable only for sophisticated investors. Alternative investments are often sold by prospectus that discloses all risks, fees, and expenses. They are not tax efficient and an investor should consult with his/her tax advisor prior to investing. Alternative investments have higher fees than traditional investments and they may also be highly leveraged and engage in speculative investment techniques, which can magnify the potential for investment loss or gain and should not be deemed a complete investment program. The value of the investment may fall as well as rise and investors may get back less than they invested. This site is published for residents of the United States who are accredited investors only. Registered Representatives and Investment Advisor Representatives may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed until appropriate registration is obtained or exemption from registration is determined. Not all of services referenced on this site are available in every state and through every representative listed. For additional information, please contact the Realized Compliance department at 512-472-7171 or info@realized1031.com. - [Terms & Conditions](https://www.realized1031.com/terms-and-conditions) - [Privacy Policy](https://www.realized1031.com/privacy-policy) - [Form CRS](https://www.realized1031.com/hubfs/common-files/disclosures/FormCRS.pdf) - [ADV 2A](https://www.realized1031.com/hubfs/common-files/disclosures/ADV2A.pdf) - [Reg BI Disclosures](https://www.realized1031.com/hubfs/common-files/disclosures/RegBI.pdf) -   © 2026 Realized Holdings, Inc. ```json { "@context" : "http://schema.org/", "@type" : "BlogPosting", "articleBody" : "The tax code seems to be constantly changing, and that applies to the rules regarding 1031 exchanges too. Do vehicles still qualify for a 1031 exchange? That’s what this article will discuss. What Is a 1031 Exchange? A 1031 exchange is a tool used by real estate investors that allows them to swap one investment property for another and defer capital gains or losses or capital gains taxes that would otherwise apply at the time of sale. Sometimes a 1031 exchange is also called a Starker exchange or like-kind exchange. Section 1031 can apply to property beyond real estate. How a 1031 Exchange Works A seller can delay capital gains taxes by selling a property and putting the money towards a property similar in nature and value. This is the process: Identify the property you want to sell and buy. Choose a qualified intermediary, known as an exchange facilitator. The intermediary holds the funds in escrow until the exchange is completed. Notify the IRS of the transaction via Form 8824 with your tax return. On the form, you’ll detail the properties, the timeline of the transactions, who was involved in the process, and the money involved. Relinquish the property. Buy the replacement property. Vehicles and 1031 Exchanges As of January 1, 2018, under the 2017 Tax Cuts and Jobs Act (TCJA), exchanges of personal or intangible property like machinery, equipment, artwork, collectibles, patents, and other intellectual property, and yes, vehicles generally no longer qualify for nonrecognition of gain or loss as 1031 exchanges. Those exchanges now result in taxable gain or loss in the year of the exchange. There is a bit of a silver lining, though. The TCJA includes depreciation provisions that help counter the loss of the 1031 exchange benefits, and some of the provisions are specific to vehicles. In some cases, the provisions will give you a better year-one tax savings on vehicles than you would have received with a 1031 exchange. The TCJA increased the level of bonus depreciation percentage from 50% to 100% for qualified property acquired and placed into service after September 27, 2017, and before January 1, 2023. Before the TCJA, used property wasn’t eligible for bonus depreciation. But after September 27, 2017, property acquired in used condition but of first use to the taxpayer generally qualifies for 100% bonus depreciation. TCJA also increased the depreciation limits for passenger vehicles placed into service after December 31, 2017. A passenger vehicle includes any four-wheeled vehicle made for primary use on public streets, roads, and highways that has an unloaded gross vehicle rating of 6,000 pounds or less. So no, vehicles no longer qualify for a 1031 exchange but the depreciation limits for them have been increased. This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. Realized does not provide tax or legal advice. This material is not a substitute for seeking the advice of a qualified professional for your individual situation. Costs associated with a 1031 transaction may impact investor’s returns and may outweigh the tax benefits. The depreciation schedule for any investment property may affect the property owner’s income bracket and/or tax status. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities.", "articleSection" : [ "1031 Exchange" ], "author" : { "@type" : "Person", "email" : "marketing@realized1031.com", "image" : "", "name" : "The Realized Team", "url" : "https://www.realized1031.com/blog/author/the-realized-team" }, "dateModified" : "2022-08-22T12:00:00+0000", "datePublished" : "2022-08-22T12:00:00+0000", "description" : "Do vehicles still qualify for a 1031 exchange? That’s what this article will discuss. ", "headline" : "Do Vehicles Qualify for a 1031 Exchange?", "image" : { "@type" : "ImageObject", "height" : 392, "url" : "https://733513.fs1.hubspotusercontent-na1.net/hubfs/733513/car-845452240.jpg", "width" : 750 }, "mainEntityOfPage" : "https://www.realized1031.com/blog/do-vehicles-qualify-for-a-1031-exchange", "name" : "Do Vehicles Qualify for a 1031 Exchange?", "publisher" : { "@type" : "Organization", "address" : { "@type" : "PostalAddress", "addressCountry" : "USA", "addressLocality" : "Austin", "addressRegion" : "TX", "postalCode" : "78701", "streetAddress" : "500 W 13th Street " }, "logo" : { "@type" : "ImageObject", "height" : 60, "url" : "http://www.realized1031.com/hubfs/Images/Brand/Logo/Realized/Realized-Logo-Black-No-Margin-296x60-AMP.png", "width" : 296 }, "name" : "Realized" }, "thumbnailUrl" : "https://733513.fs1.hubspotusercontent-na1.net/hubfs/733513/car-845452240.jpg" } ```