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Illinois 1031 Exchanges

In most cases, the rules for a 1031 exchange are no different for Illinois relative to the rest of the country. However, Illinois does have some special considerations when it comes to Illinois land trust, particularly how the interest in the land trust is treated for tax purposes. According to Rev. Rul. 92-105, a taxpayer's interest in an Illinois land trust is considered real property for the purposes of a 1031 exchange. This is significant because, under Illinois state law, a beneficiary's interest in a land trust is typically characterized as personal property.

In many other states, the distinction between real and personal property in trusts can be more straightforward, but Illinois's specific treatment of land trusts allows for a beneficial interpretation under section 1031 of the Internal Revenue Code. This means that if you're using an Illinois land trust to facilitate a 1031 exchange, the beneficiary's interest in the trust can be exchanged for other real property without recognition of gain or loss, provided all other requirements of section 1031 are met.

This ruling is particularly advantageous for investors looking to leverage the flexibility and privacy benefits of a land trust while still participating in the tax-deferral benefits of a 1031 exchange. It's a unique feature of Illinois real estate law that can be a powerful tool in the right circumstances.

Illinois State Tax Information

The Combined Rate accounts for Federal, State, and Local tax rate on capital gains income, the 3.8 percent Surtax on capital gains and the marginal effect of Pease Limitations (which results in a tax rate increase of 1.18 percent).

Beginning June 1, 2017, taxpayers cannot claim the personal exemption if their adjusted gross income exceeds $250,000, or $500,000 for those filing jointly.

State Rate


Local Rate


Combined Rate




1031 Exchange Providers in Illinois

CDEC 1031 Exchange

New York, NY

Founded in 1989, Chicago Deferred Exchange Company ("CDEC") is one of the oldest and most experienced Qualified Intermediaries in the country and is part of Wintrust Financial. CDEC has commented before the IRS National Office on important industry issues and is a nationally recognized authority on Section 1031 Like-Kind Exchanges. CDEC applied for, and received, several Private Letter Rulings from the Internal Revenue Service, as well as rulings from the City of New York Department of Finance, the State of New Jersey and the District of Columbia. A separate Qualified Trust Account is created for every client on every transaction. Funds held in trust, for the benefit of our clients, are segregated from creditors' claims by operation of law.
Plenti 1031 Exchange

Carlsbad, CA

Just a few clicks away from easy, simple, answers and tax savings...the only investor friendly 1031 firm with technology to safeguard and streamline your exchange.
Chicago Deferred Exchange Company, LLC

Chicago, IL

Chicago Deferred Exchange Company, LLC, based in Illinois, was established in 1989 and is recognized as one of the oldest and most experienced Qualified Intermediaries in the United States. The company has engaged with the IRS National Office on significant industry matters and is considered a national authority on Section 1031 Like-Kind Exchanges. CDEC has successfully obtained several Private Letter Rulings from the IRS, as well as from the finance departments of New York City, New Jersey, and the District of Columbia.For each transaction, CDEC establishes a separate Qualified Trust account for every client, ensuring that funds are protected from creditors by law. The company invests these funds in professionally managed, highly liquid institutional money market funds with a minimum rating of AA, with all interest earned accruing to the client's account.
Investment Property Exchange Services, Inc. (IPX1031)

Chicago, IL

Investment Property Exchange Services, Inc. (IPX1031) is headquartered in Illinois and specializes exclusively in 1031 Tax Deferred Exchanges. As a part of Fidelity National Financial, a Fortune 500 company, IPX1031 offers significant financial security and expertise in handling exchange processes. However, they are not a member of the Federation of Exchange Accommodators.
Midland 1031

Fort Myers, FL Resources

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