Owning aviation real estate — whether it’s a hangar home, an airpark lot, or a private runway — can be both a lifestyle investment and a smart financial strategy. But when it’s time to sell, capital gains taxes can take a big bite out of your profits.
That’s where a 1031 exchange for aviation properties comes in. By reinvesting the proceeds into another qualifying property, you can defer capital gains taxes and unlock powerful financial advantages.
Here are the top tax benefits aviation property owners should know.
1. Defer Capital Gains Taxes
The most well-known benefit of a 1031 exchange is the ability to defer paying capital gains taxes. Instead of handing a portion of your profits to the IRS, you keep your equity working for you in your next investment.
For aviation property owners, that could mean trading up from:
- A single hangar to a larger, income-producing facility
- An airpark lot to a private runway property
- A residential hangar home to a commercial aviation development
2. Compound Growth Potential
Deferring taxes doesn’t just save money in the short term — it fuels long-term portfolio growth. By reinvesting your full equity, you’re compounding returns on a larger base instead of shrinking your purchasing power with a tax bill.
3. Flexibility in Property Types
The IRS’s definition of “like-kind” property is broad. This means you can exchange different types of aviation real estate while still preserving the tax benefits. For example, you might sell a hangar home and reinvest into an airpark subdivision or even a commercial aviation facility.
4. Estate Planning Benefits
A 1031 exchange can be a powerful estate planning tool. When aviation property is passed to heirs, it typically receives a step-up in basis to current market value, potentially eliminating deferred capital gains altogether. This allows you to build and preserve wealth across generations.
5. Potential State Tax Savings
In addition to federal capital gains, many states also impose their own tax. A 1031 exchange can help you defer both federal and state taxes, keeping even more money in your pocket.
Why Deferred Makes the Difference
While the tax advantages of a 1031 exchange are powerful, your results depend heavily on working with the right Qualified Intermediary (QI). That’s why AV8 Realty partners with Deferred — the no-fee, investor-friendly way to 1031 exchange.
- No Fees – Deferred charges $0 exchange fees, saving aviation investors thousands.
- Earn Interest – Sale proceeds sit in a dedicated, interest-bearing account, with earnings shared back to you.
- Trusted & Secure – Their experienced team ensures compliance while protecting your assets throughout the process.
👉 Learn more about 1031 exchanges with Deferred through our partner page
For aviation property owners, a 1031 exchange isn’t just a tax strategy — it’s a growth strategy. By deferring capital gains, reinvesting full equity, and planning ahead for the next generation, you’re making your aviation investments work harder for you.And with Deferred as your Qualified Intermediary, you’ll enjoy a no-fee, interest-earning process that keeps your money in the sky, not tied up in taxes.
