1031 Exchange for Inherited Property: What Heirs Need to Know

A 1031 exchange on inherited property is possible when the property qualifies as investment or business-use real estate, the taxpayer is set up correctly, and the exchange deadlines are met. But most heirs who sell soon after inheritance do not need one, because the basis adjustment at death often leaves little post-death gain to defer. In this video, Rhett Fruitman from Inherited Property Match explains when a 1031 exchange can work for inherited rental property, inherited commercial real estate, estate-owned property, trust-owned property, and multi-heir situations - and when a standard sale may be simpler. This is general information, not tax, legal, financial, or real estate advice. Before you sell inherited property, speak with a CPA and, when probate or trust administration is involved, an estate or probate attorney. Read the full guide: 1031 Exchange for Inherited Property: What Heirs Need to Know If you inherited property and need help finding a broker who understands estate-related sales, Inherited Property Match can connect you with a vetted broker experienced with inherited property. The match is free. 00:00 Can you do a 1031 exchange on inherited property? 01:00 Why do most heirs not need a 1031 exchange right after inheritance? 02:01 When does a 1031 exchange for inherited property make sense? 02:47 Can you use a 1031 exchange on an inherited personal residence? 03:35 What are the core 1031 exchange rules heirs need to know? 04:37 How do boot and related-party rules affect inherited property exchanges? 05:39 Can an estate or trust do a 1031 exchange? 06:34 What estate and title issues make inherited-property 1031 exchanges harder? 07:28 What is the safest way to approach a 1031 exchange on inherited property?