Anyone with Tax know-how know whether and how a 1031-exchange could work for selling wine and reinvesting in more wine?
It’s not specifically disallowed like stocks, business inventory, or a primary residence, people use a 1031 exchange for Artwork and valuable collectibles (vintage cars, gold coins etc), otherwise personal property is off-limits. You might have a tough time verifying that the wine is held for investment not drinking, but with rare and collectible wines it could work.
This site had some useful info, and included a reference to wine:
I believe 1031 exchanges under the new tax bill are no longer allowed for personal property but would confirm with your tax professional.
Ahh you are right, the final bill did repeal 1031 for all but real estate.
Backdate the documents.
Way to advocate fraud. Probably not a good idea.
Claim that the wine is bottled real estate…terroir.
LoL! THAT is hilarious!
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The NY Times just had a story on this: How the Tax Code Rewrite Favors Real Estate Over Art
The story wasn’t clear on this, but I guess this allows you to, once again, roll over the entire gain from the sale of a personal residence (assuming the new property is worth more than the old one). Does anyone know about that for sure? That would be a big gain for residents of the states that got hit hard by the limitations on mortgage and property tax deductions.
Some 1031 exchange intermediaries have been major problems, leaving investors will scant assets or recourse, if an intermediary acts improperly with the investable funds. When real-estate sale proceeds were never truly rolled over into qualifying real estate in timely manner, despite intermediary representations to do so, investors lost their capital gain tax deferrals and sometimes even their rollover proceeds, then becoming just unsecured creditors of the defunct intermediaries.
In other words, the profit from each real-estate sale became fully taxable after the missed rollover deadline, which any intermediary fraud loss could not offset in dollar-for-dollar manner, for tax purposes. The two transactions were deemed distinct and unrelated.
OUCH!
Only income producing properties qualify and they have to be considered like kind.
Yup. I didn’t want to wade into that…but there are a lot of shady 1031 service providers, and in some cases they are just running off with the money. Saving a couple bucks on taxes and losing a staggering amount of notional is a shithole of a trade.
Gee, we elect a real estate developer and get laws that favor…real estate developers. Smart. Very smart.
“It’s only illegal if you get caught.”
Donald J. Trump
“Wine investment” is a rationalization for spending too much money on too much wine which nobody will ever even drink. Within these Venn diagrams are the Rudy and John Fraud, the Premier Cru Ponzi scheme, Ray Walker Shithouse Ilan, and Vinotemp Customer Service.
You’re forgetting LivEx and basically 80+% of the wine auction market.
One of these ideas has to work, there is no way. A group of assets, such as a vineyard and winery, can be included in a 1031 exchange, which includes land, equipment, and intangibles. The property exchanged does not have to be of the same kind. Other types of property or money can be transferred without causing the entire transaction to fall outside of the 1031 exchange. You can go to https://www.transfs.com/information-on-1031-exchange/ for more details, it’s explained very well what options do you have.