Chapter 04 · Sale
1031 Like-Kind Exchange: Not Available for Canadians
Why 1031 exchanges don't work for Canadian residents.
Direct answer · 60-second summary
The 60-second version
- 1031 exchange = US gain deferral
- Applies to US residents only
- Canadian residents: taxed in Canada
- Canada has no deferral equivalent
- Section 44 CRA: business property only
- Double taxation: US defer + Canada tax
- Florida property to Canada impossible
- Consult cross-border accountant
Acronyms used in this guide
- 1031 — Section 1031 (Like-Kind Exchange)
- Section 44 — Section 44 CRA (deferred former business property)
- CRA — Canada Revenue Agency
- IRS — Internal Revenue Service
- IRC — Internal Revenue Code
1031 exchange: US residents only
IRC Section 1031 allows like-kind real estate exchange with US gain deferral. But applies ONLY to US residents, not foreigners.
Canadians: no deferral equivalent
Canada Revenue Agency (CRA) Section 44 allows deferral for losses only if old property was business and replacement immediate. Does not apply to 1031-style residential real estate exchanges.
Double taxation: Canadian risk
Canadian resident sells Florida with attempted 1031: US gains defer, but CRA taxes Canada in year of sale (50% inclusion). If gains realized later, double taxation possible.
Canadian seller strategy
Plan Florida sale BEFORE 1031 desires. Sell, pay Canada/US taxes. Then reinvest proceeds in US property without 1031 if funds available. Consult cross-border tax pro.
Every figure, rate, threshold, and deadline in this guide is drawn from a verifiable primary source listed at the bottom of the page. The article is updated whenever the underlying rules change, with a fresh review date stamped at the top.
Sources and references
Disclaimer
This guide is for educational purpose only.
For concrete decisions, consult a licensed attorney.