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. 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 Many widely shared charts from other intermediaries contain outdated rates and rules that were never enacted.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

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

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.