Selling an aviation property — whether it’s a hangar home, airpark lot, or private runway — comes with exciting opportunities but also potential tax burdens. A 1031 exchange for aviation real estate allows you to defer capital gains taxes and keep more of your equity working for you.
Here’s a clear step-by-step look at how the process works, and how our partner Deferred makes it seamless.
Step 1: Decide If Your Property Qualifies
Not all properties are eligible for a 1031 exchange. To qualify:
- The property must be held for investment or business use (not your primary residence).
- The replacement property must also be for investment or business use.
- Both properties must be “like-kind,” which is broad and can include different types of aviation properties (e.g., selling a hangar home and purchasing an airpark lot).
Step 2: Choose a Qualified Intermediary (QI)
The IRS requires a Qualified Intermediary (QI) to facilitate your exchange. The QI holds your sale proceeds and ensures compliance with IRS rules.
👉 This is where Deferred comes in. As a trusted QI, they provide a secure, no-fee, interest-bearing process that protects your funds while guiding you through every step.
Step 3: Sell Your Aviation Property
Once your property sells, the proceeds must go directly to your QI — you cannot receive the funds yourself. Deferred will set up a dedicated account in your name and manage the transfer securely.
Step 4: Identify Replacement Properties (45 Days)
Within 45 days of selling, you must identify your replacement property or properties in writing. For aviation investors, this could include:
- Larger or upgraded hangar homes
- Airpark lots with better amenities
- Private airports or commercial aviation facilities
Step 5: Close on the Replacement Property (180 Days)
You have 180 days from the sale of your property to close on one of the identified replacements. Timing is critical — which is why working with a QI that operates efficiently, like Deferred, helps you avoid costly mistakes.
Step 6: Complete the Exchange & Defer Taxes
Once you close, the exchange is complete. You’ve successfully deferred capital gains taxes and reinvested your equity into a new aviation property — keeping your investment dollars growing instead of going to the IRS.
Why Use Deferred for Your Aviation 1031 Exchange?
Deferred is built to make 1031 exchanges smarter and more cost-effective:
- No Fees – The only No Fee way to 1031 Exchange, saving you thousands compared to traditional QIs.
- Earn Interest – Funds sit in a dedicated, interest-bearing account, and Deferred shares earnings with you.
- Experience & Security – A trusted Qualified Intermediary that ensures compliance and protects your assets every step of the way.
👉 Learn more about 1031 exchanges with Deferred through our partner pageA 1031 exchange for aviation real estate is one of the most powerful tools available to hangar home owners, airpark investors, and private runway property sellers. By following the process and working with a trusted QI like Deferred, you can maximize your returns, defer taxes, and keep your aviation investments flying high.
