1031 Exchange in Utah

By Garrett Pierson, commercial real estate agent at Crest Realty, Ogden. Updated October 29, 2026.

A 1031 exchange lets you sell investment real estate in Utah and buy other investment real estate without paying capital gains tax on the sale right now. The rules are federal and the deadlines are strict. The hard part is finding the right replacement property inside 45 days, and that is the part I do.

The rules in one table

Rule	What it means
Qualifying property	Real estate held for investment or business use. Excludes your home and flips.
Like-kind	Any U.S. real estate for any other U.S. real estate. Land for a warehouse, a duplex for a retail pad.
Qualified intermediary	A third party holds the sale proceeds. If the money touches your account, the exchange fails.
Day 45	Written identification of up to three properties (or use the 200% or 95% rule).
Day 180	Close on the replacement property. Earlier if your tax return is due first.
Same taxpayer	The name on the old deed must be the name on the new one.
Full deferral	Buy equal or greater value, replace the debt, reinvest all the equity. Anything left over is taxable boot.

Section 1031 is federal law, so there’s no separate Utah exchange statute. Utah income tax starts from your federal return, so the deferral carries through to your Utah return. Depreciation recapture is deferred along with the gain. Your CPA should confirm the numbers for your situation before you close.

Why the 45 days is the real problem

The exchanges I see fail are the ones where the seller closed first, started looking second, and found nothing worth owning by day 45. In a county the size of Weber or Davis, the number of commercial buildings that fit a given price, property type, and return is small on any given day, and the good ones trade before they reach the public listing sites.

Start the search before you list. In practice that looks like:

Price the property you’re selling first. You need the real number to know what you can buy. How I value commercial property explains the method, and I will run it for you at no charge.
Write down the target. Property type, price range, minimum cap rate or cash-on-cash return, and the counties you will accept. A clear target lets me check off-market owners as well as listings.
Build the short list while your sale is under contract. By the time you close, you should already have two or three buildings you have walked and underwritten.
Identify three. Use the three-property rule and name backups. If the first one falls through on inspection, you still have a path to day 180.
Close with the debt and equity matched. I coordinate with your intermediary and lender so the replacement purchase covers the value and the loan balance you need to avoid boot.

EstiMate, the calculator app I built, has a 1031 exchange tracker with countdown rings for both deadlines, so both dates live on your phone.

What I handle and what your other advisors handle

Me: valuation of the property you are selling, the sale itself if you want one agent for both sides, the replacement property search in Weber, Davis, Box Elder, and Salt Lake County, underwriting each candidate, and negotiating the purchase inside your deadlines.
Qualified intermediary: holds the funds and prepares the exchange documents. I can refer you to intermediaries that Northern Utah investors use, and you choose.
Your CPA: confirms the gain, the basis, the boot calculation, and how the exchange shows on your federal and Utah returns.
Your lender: the replacement loan. Start the application during the identification period.

I own commercial property and have sat on the buyer and seller side of exchanges myself. If you are thinking about selling an investment property anywhere in Northern Utah, the right time to call is before it’s listed. See what is trading now on the Ogden commercial real estate page.

1031 Exchange Questions

The same way it works everywhere in the United States, because Section 1031 is federal tax law. You sell investment or business real estate, a qualified intermediary holds the proceeds, you identify replacement property in writing within 45 days, and you close on it within 180 days of the sale. Utah starts its income tax from your federal return, so a gain deferred federally is deferred for Utah as well. Confirm the details with your CPA.

Both clocks start the day you close on the property you sold. By day 45 you must deliver a written list of replacement properties to your qualified intermediary. By day 180, or your tax return due date including extensions if that comes first, you must close on one or more of the properties on that list. Neither deadline can be extended for weekends, holidays, or a deal that fell through.

You can use one of three rules. Three-property rule: up to three properties of any value. 200% rule: any number of properties as long as their combined value is no more than twice the value of what you sold. 95% rule: any number of properties if you end up buying at least 95% of the total value you identified. The three-property rule is the simplest and the one I see used most.

No. Since 2018, Section 1031 applies only to real property held for investment or for use in a business. Your primary residence doesn’t qualify, and neither does property held mainly for resale, such as a fix-and-flip. A rental you have held and reported as a rental does.

Boot is anything you receive in the exchange that is not like-kind real estate: cash left over, or debt on the old property that is not replaced with equal or greater debt on the new one. Boot is taxable in the year of the exchange. To defer the whole gain, buy replacement property of equal or greater value and reinvest all the equity.

Yes, through a reverse exchange. An exchange accommodation titleholder takes title to the new property while you sell the old one, and the same 45 and 180 day limits apply in reverse. It costs more than a standard exchange and has to be set up before you close on the purchase, so talk to your intermediary first.

Garrett Pierson is a commercial real estate agent at Crest Realty, 978 Chambers St #3, Ogden, UT 84403. He owns commercial property and founded EstiMate, a commercial real estate calculator app. See also the commercial real estate glossary.