1031 Exchange Rules by State

Last reviewed: June 2026. State rules change. Verify current forms before closing.

Federal 1031 exchange rules are the same in all 50 states. State rules are not. Sixteen states withhold money at closing when a nonresident sells. Four states keep tracking your deferred gain after you exchange into another state. A few states have traps that surprise even experienced investors, like Vermont's separate Land Gains Tax or California's annual FTB 3840 filing.

This guide series covers the state-level rules for a 1031 exchange in every state. If you're new to exchanges, start with our 1031 exchange for dummies guide first. We verified every rate, form, and deadline against primary government sources: state statutes, regulations, and current revenue department forms and instructions. Many widely shared charts from other intermediaries contain outdated rates and rules that were never enacted. Ours cite the source.

What Each State Guide Covers

• What is different in that state, in plain language
• Whether the state conforms to IRC Section 1031
• The state tax rate on real estate gains
• Withholding at closing, and the exemption forms exchangers use
• Claw-back and ongoing reporting rules
• The federal taxes that still apply, with a worked example
• FAQs and links to the official state forms

State Guides

Each state below has two guides: a services page for starting an exchange in that state, and a tax-rules page covering withholding, claw-back and state-specific filing detail.

• 1031 Exchange in Alabama — state tax rules
• 1031 Exchange in Alaska — state tax rules
• 1031 Exchange in Arizona — state tax rules
• 1031 Exchange in Arkansas — state tax rules
• 1031 Exchange in California — state tax rules
• 1031 Exchange in Colorado — state tax rules
• 1031 Exchange in Connecticut — state tax rules
• 1031 Exchange in Delaware — state tax rules
• 1031 Exchange in the District of Columbia
• 1031 Exchange in Florida — state tax rules
• 1031 Exchange in Georgia — state tax rules
• 1031 Exchange in Hawaii — state tax rules
• 1031 Exchange in Idaho — state tax rules
• 1031 Exchange in Illinois — state tax rules
• 1031 Exchange in Indiana — state tax rules
• 1031 Exchange in Iowa — state tax rules
• 1031 Exchange in Kansas — state tax rules
• 1031 Exchange in Kentucky — state tax rules
• 1031 Exchange in Louisiana — state tax rules
• 1031 Exchange in Maine — state tax rules
• 1031 Exchange in Maryland — state tax rules
• 1031 Exchange in Massachusetts — state tax rules
• 1031 Exchange in Michigan — state tax rules
• 1031 Exchange in Minnesota — state tax rules
• 1031 Exchange in Mississippi — state tax rules
• 1031 Exchange in Missouri — state tax rules
• 1031 Exchange in Montana — state tax rules
• 1031 Exchange in Nebraska — state tax rules
• 1031 Exchange in Nevada — state tax rules
• 1031 Exchange in New Hampshire — state tax rules
• 1031 Exchange in New Jersey — state tax rules
• 1031 Exchange in New Mexico — state tax rules
• 1031 Exchange in New York — state tax rules
• 1031 Exchange in North Carolina — state tax rules
• 1031 Exchange in North Dakota — state tax rules
• 1031 Exchange in Ohio — state tax rules
• 1031 Exchange in Oklahoma — state tax rules
• 1031 Exchange in Oregon — state tax rules
• 1031 Exchange in Pennsylvania — state tax rules
• 1031 Exchange in Rhode Island — state tax rules
• 1031 Exchange in South Carolina — state tax rules
• 1031 Exchange in South Dakota — state tax rules
• 1031 Exchange in Tennessee — state tax rules
• 1031 Exchange in Texas — state tax rules
• 1031 Exchange in Utah — state tax rules
• 1031 Exchange in Vermont — state tax rules
• 1031 Exchange in Virginia — state tax rules
• 1031 Exchange in Washington — state tax rules
• 1031 Exchange in West Virginia — state tax rules
• 1031 Exchange in Wisconsin — state tax rules
• 1031 Exchange in Wyoming — state tax rules

More state guides are on the way. Need answers on a state we have not published yet? Call us at 888-508-1901 and we will walk you through it.

The Quick National Picture

States that withhold at closing (16): Alabama, California, Colorado, Delaware, Georgia, Hawaii, Maine, Maryland, Mississippi, New Jersey, New York, Oregon, Rhode Island, South Carolina, Vermont, and West Virginia. Each has an exemption process for qualifying exchanges.

States with claw-back rules (4): California, Oregon, Montana, and Massachusetts can tax previously deferred gain when you later sell out-of-state replacement property in a taxable sale.

States with no income tax (9): Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Federal taxes still apply, and they are usually the biggest number on the closing statement.

Want to learn more? Our 1031 exchange guide covers the full process from sale to replacement. Ready to start an exchange? WealthBuilder 1031 is attorney-owned, serves all 50 states, and charges a flat $1,000 fee. Start at WealthBuilder1031.com or call 888-508-1901.

This page does not constitute legal or tax advice. Consult your attorney and tax advisor about your specific situation.