The short answer
Yes. A lawful permanent resident meets the green-card test in section 7701(b) and is a US resident for income tax, taxed on worldwide income at the same rates and with the same deductions as a citizen. You exchange under the same section 1031 rules, report on the same Form 8824, and because a resident is a United States person, the buyer does not withhold FIRPTA tax at your closing. The rules part ways only if you later give up the card: a long-term resident who leaves as a covered expatriate is treated as selling everything, including the replacement property and the gain the exchange deferred.
At a glance
| Tax status | Resident alien for any year you hold the card at any time |
|---|---|
| Exchange rules | Identical to a citizen's: same deadlines, same Form 8824 |
| FIRPTA at closing | Not applicable; give the buyer a certification of non-foreign status |
| Status ends | On written abandonment, USCIS or court termination, or certain treaty claims |
| Long-term resident | Green card in at least 8 of the last 15 tax years |
| Exit tax trigger 2026 | Average annual net income tax over $211,000, net worth of $2 million, or no compliance certification |
| 2026 exclusion | First $910,000 of deemed-sale gain excluded |
The green card makes you a US resident for income tax
Section 7701(b)(1)(A)(i) treats an alien as a resident for any calendar year in which the person "is a lawful permanent resident of the United States at any time." The IRS calls this the green card test and says the status continues until you voluntarily renounce it in writing, or it is terminated administratively by USCIS or judicially by a federal court.
The consequence is stated plainly on the IRS page on taxation of resident aliens: "U.S. residents are generally taxed in the same way as U.S. citizens," with worldwide income reported on Form 1040 and the same filing statuses, deductions and rate tables.
The exchange itself runs exactly as it would for a citizen
Section 1031 has no citizenship test. Your relinquished and replacement property must be held for investment or business use, the replacement must be US real property, and you identify within 45 days and close within 180, as every exchanger does.
You report on Form 8824 with your Form 1040. The replacement takes a carryover basis under section 1031(d), and the deferred gain stays inside it until a taxable sale, as described on whether a 1031 is tax-free or deferred.
No FIRPTA withholding, because a resident is not a foreign person
Section 1445 withholding applies to dispositions by a foreign person. Section 7701(a)(30) defines a United States person to include "a citizen or resident of the United States," so a green-card holder is outside FIRPTA.
The buyer may ask for proof. The IRS exceptions page describes the certification of non-foreign status: a statement under penalties of perjury with your name, US taxpayer identification number and home address. Under Reg. section 1.1445-2(b) a buyer who does not get one may withhold anyway, so have it ready for the title company before closing week.
The difference comes if you give up the card
Section 877A treats all property of a covered expatriate as "sold on the day before the expatriation date for its fair market value." It reaches long-term residents, defined in section 877(e)(2) as card holders in at least 8 of the 15 tax years ending with the year residency ends.
You are covered if any of three tests is met. For 2026 Rev. Proc. 2025-32 sets the average annual net income tax test at more than $211,000; the others are a net worth of $2 million or more and failing to certify five years of tax compliance on Form 8854. The same revenue procedure sets the 2026 exclusion at $910,000 of deemed-sale gain.
Because exchange replacements carry the old basis, the built-in gain on a replacement often includes every gain deferred along the chain. The IRS expatriation tax page notes that tax on deemed-sale property can be deferred by election.
Hypothetical: the same replacement property, two outcomes
A card holder of 12 years owns a replacement building worth $2,000,000 with a $600,000 carryover basis and has a net worth above $2 million. The figures are hypothetical and assume this is the only appreciated asset; run your own with a CPA who prepares Form 8854.
- Keeps the card: nothing is taxed until a sale, and a further exchange can defer again.
- Gives up the card in 2026 as a covered expatriate: $1,400,000 of gain is deemed realized, the first $910,000 is excluded, and $490,000 is taxed that year.
- Gives up the card after fewer than 8 of 15 years: not a long-term resident, so no deemed sale, but a later sale as a nonresident triggers FIRPTA withholding.
- What changes when you leave is covered on moving abroad after a 1031.
A DST works the same for you as for a citizen
Beneficial interests in a Delaware statutory trust are like-kind replacement property for any US taxpayer under Rev. Rul. 2004-86, and residency status does not change the accredited investor tests. A traditional DST can take some or all of the proceeds; it is illiquid and its distributions are not guaranteed. If you expect to leave the United States, ask how a nonresident owner is withheld on before you buy, as described on foreign investors and DSTs.
Related questions
I hold a work visa, not a green card. Am I treated the same way?
Only if you meet the substantial presence test in section 7701(b), which makes you a resident for that year. If you do not, you are a nonresident alien, the buyer withholds FIRPTA tax, and the foreign seller rules apply.
My card expired while I was abroad. Am I still a resident for tax?
The IRS says the status continues until you renounce it in writing or it is terminated by USCIS or a court, so an expired card alone does not usually end it. Confirm with an immigration attorney and your CPA.
Can I exchange into property in my home country?
No. Section 1031(h) says US and foreign real property are not like-kind, for residents and citizens alike.
Do I pay the same capital gains rates on any boot?
Yes. Residents use the same rate schedules as citizens, so boot is taxed at the 2026 capital gain brackets in Rev. Proc. 2025-32, with recapture and the net investment income tax applying as they would to a citizen.
Does claiming treaty residence in another country affect this?
It can. Section 7701(b)(6) says a person who is treated as a resident of a foreign country under a treaty, does not waive the treaty benefit and notifies the IRS stops being treated as a lawful permanent resident, which can start the expatriation rules.
Sources
Checked against these publications on September 30, 2026. Rules and figures change; confirm the current version with your CPA or attorney before you act. This page is general information, not tax or legal advice.
- 26 U.S.C. section 7701(a)(30) and (b), United States person and resident alien
- IRS, Alien residency: green card test
- IRS, Taxation of resident aliens
- 26 U.S.C. section 1031, including (d) and (h)
- Treas. Reg. section 1.1445-2(b), certification of non-foreign status
- IRS, Exceptions from FIRPTA withholding
- 26 U.S.C. section 877A, tax responsibilities of expatriation
- 26 U.S.C. section 877(a)(2) and (e)(2), covered expatriate tests and long-term resident
- Rev. Proc. 2025-32, sections 4.37 and 4.38 (2026 expatriation amounts)
- IRS, Expatriation tax