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Are Oil and Gas Royalties eligible properties for a 1031 Exchange?

April 26, 2017eligible Gas Oil properties royalties

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Are Oil and Gas Royalties eligible properties for a 1031 Exchange?

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Yes. Since the early 1040’s, court rulings have affirmed that Oil and Gas Royalties qualify as “Like-kind” to all other forms of Real Property. Due to these rulings, investors have been able to take advantage of the 1031 tax deferral by exchanging between brick-and-mortar real estate and Royalty Interests. For more information regarding the IRS’s position on tax-free 1031 Exchanges to natural Energy Interests, go to www.irs.gov/irm/part4/ch35s03.html Then scroll down to: 4.41.1.4.6 (07-31-2002) Exchange of Property.