1031 Exchange Rules in Nevada

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

What Is Different in Nevada

Nevada has no state income tax, no state capital gains tax, no withholding at closing, and no state exchange paperwork. For the exchange itself, Nevada could not be simpler. The thing Nevada investors most need to understand is what follows them here: exchange California property into Nevada property and California keeps a claim on the deferred gain, with an annual filing to match.

Does Nevada Conform to IRC Section 1031?

There is nothing to conform to. Nevada has no personal income tax, so the state takes no position on your exchange. A 1031 exchange is an IRS-approved way to sell investment property and buy replacement property without paying tax on the gain right away. In Nevada, the exchange is purely a federal matter. Our 1031 exchange guide walks through how it works.

Nevada Tax Rate on Real Estate Gains

Zero. Nevada does not tax individual income or capital gains. Compare that with neighboring California at up to 13.3% and the appeal is obvious.

Withholding at Closing

None. Nevada has no withholding requirement on real estate sales, for residents or nonresidents. No exemption forms, no state certificates, no waiting on a state refund.

Federal Taxes Still Apply

Without an exchange, a Nevada sale faces three federal layers.

Example: $1,000,000 sale of a Nevada rental. Original purchase $600,000, with $100,000 of depreciation taken, so the adjusted basis is $500,000 and the total gain is $500,000.

Figures are illustrative and rounded. Your rates depend on income, filing status, and basis. A qualifying 1031 exchange may defer all three federal layers. Run your numbers with our 1031 exchange calculators, then confirm them with your tax advisor.

The California Connection

A huge share of Nevada exchange activity starts in California, so know these two rules.

• At the California closing. California withholds 3.33% of the sales price unless you certify the 1031 exemption on Form 593 before closing. Your qualified intermediary helps coordinate it.
• After you own in Nevada. The deferred California gain remains California-source income. You must file California Form FTB 3840 in the exchange year and every year after, for as long as you hold the Nevada replacement property. Skip the filing and the Franchise Tax Board may assess tax on the full deferred gain. Moving to Nevada does not erase it; only a continued chain of exchanges keeps it deferred.

Selling in Nevada and buying in a tax state? No Nevada tax now, but the new state's rules generally apply when you eventually sell there.

Risks to Keep in Mind

• Federal deadlines are unforgiving. You have 45 days to identify replacement property and 180 days to close. See the IRS rules for 1031 exchanges.
• Boot is still taxable. Cash you take out or debt you fail to replace can create recognized gain, even with no state tax in play.
• Deferral is not elimination. The federal tax comes due when you eventually sell without exchanging, unless your estate plan uses the step-up in basis. Ask your estate planning attorney.
• Out-of-state obligations follow you. A prior exchange out of a claw-back state (California, Oregon, Montana, or Massachusetts) can carry filing duties into your new ownership.

Nevada 1031 Exchange FAQs

Does Nevada tax 1031 exchanges?
No. Nevada has no state income tax, so there is no state tax to defer and no state exchange filing.

I exchanged California property into Las Vegas property. Am I done with California?
Not yet. File California Form FTB 3840 every year you hold the Nevada property. California can tax the deferred gain when you eventually sell in a taxable transaction.

Why bother with a 1031 exchange in Nevada if there is no state tax?
Federal taxes. Capital gains, depreciation recapture, and the net investment income tax can take more than a quarter of a typical gain. An exchange may defer all of it.

Do I still need a qualified intermediary?
Yes. The qualified intermediary requirement is federal. You cannot touch the sale proceeds and still qualify for deferral, no matter what state you are in.

Sources

• Internal Revenue Service, Like-Kind Exchanges, Real Estate Tax Tips
• Tax Foundation, State Individual Income Tax Rates and Brackets, 2026
• California FTB, Reporting Like-Kind Exchanges (FTB 3840 guidance)

Want to learn more? Our 1031 exchange guide covers the full process from sale to replacement. Ready to start a Nevada 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.

Ready to start your Nevada 1031 exchange? WealthBuilder 1031 acts as your qualified intermediary for a flat $1,000 fee, $750 at your sale and $250 at your purchase. See our Nevada 1031 exchange services to get started.