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Do Fabrica properties qualify for 1031 exchanges?

Per our understanding, yes. A 1031 exchange (named after Section 1031 of the tax code) lets you defer capital gains tax when you sell one investment property and buy another like-kind property. Because a property on Fabrica is real property held in your own trust, and you are treated as the owner for tax purposes, properties held in a Fabrica trust can fully benefit from 1031 like-kind exchange treatment.

That said, 1031 exchanges come with strict rules: deadlines, the use of a qualified intermediary, and requirements about how the proceeds are handled. Fabrica cannot give tax advice, and how the rules apply depends on your situation. Before you sell with a 1031 exchange in mind, verify the details with your tax advisor.

If you have questions about how selling works on Fabrica, message us through the chat bubble in the corner.

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