1031 Exchange at Closing
The paperwork that decides what leaves the closing table: state withholding forms and the exchange exemption, transfer taxes, FIRPTA, the 1099-S and the settlement statement.
A 1031 exchange is decided in the tax code, but it is executed at a closing table, and that table has its own forms. Eighteen states withhold part of the price unless the exchange exemption is claimed on the right form, often weeks before closing. Transfer taxes ignore the exchange entirely. A foreign seller faces FIRPTA on top.
These pages walk through each form and tax line by line, with the deadlines that cannot be fixed afterwards.
State closing forms
Alabama Form NR-AF3: Claiming the 1031 Exemption From Nonresident Withholding
Alabama buyers withhold 3% or 4% from nonresident sellers on sales of $300,000 or more. A like-kind exchange is exempt; Form NR-AF3 certifies it.
ReadCalifornia Form 593 for a 1031 Exchange: Line by Line
California withholds 3 1/3% of the price unless Form 593 line 10 certifies a 1031 exchange; the intermediary withholds on boot over $1,500 or a failed exchange.
ReadColorado Form DR 1083 and the 1031 Affirmation of No Tax Due
Colorado withholds the lesser of 2% of price or net proceeds from nonresident sellers over $100,000. In a full 1031 you sign the DR 1083 no-tax affirmation.
ReadDelaware Form 5403 (Now Form REW-EST) for a 1031 Exchange
Delaware's Form 5403 is now REW-EST: nonresidents pay 6.6% of gain (8.7% for C corporations) at recording. A 1031 seller checks the Part 5 exempt box.
ReadGeorgia Forms IT-AFF2 and IT-AFF3: Exchange Exemption From Nonresident Withholding
Georgia buyers withhold 3% of price from nonresident sellers. A fully deferred exchange is exempt on Form IT-AFF3; with boot, IT-AFF2 puts the 3% on gain.
ReadHawaii HARPTA and Form N-289 for a 1031 Exchange
Hawaii buyers withhold 7.25% of the amount realized unless the seller gives Form N-289. Box 2 covers a 1031 exchange, but only if no gain at all is recognized.
ReadMaine Form REW-5: Requesting a Withholding Exemption for a 1031 Exchange
Maine withholds 2.5% from nonresident sellers on sales of $100,000 or more. For a 1031, file Form REW-5 at least five business days before closing.
ReadMaryland Form MW506AE: Exchange Exemption From Nonresident Withholding
Maryland withholds 8.75% (8.25% for entities) of a nonresident's net proceeds. MW506AE with an intermediary letter must arrive 21 days before closing to exempt it.
ReadMassachusetts Nonresident Real Estate Withholding (Effective 2025) and 1031 Exchanges
Since November 1, 2025 Massachusetts withholds 4% on sales of $1 million or more. A 1031 seller certifies the deferred gain on the Transferor's Certification.
ReadMississippi Nonresident Withholding (Form 89-386) and the 1031 Affidavit
Mississippi's 5% nonresident withholding covers sales over $100,000 that are not an exchange. A like-kind exchange is outside it; Form 89-386 cuts it to 5% of gain.
ReadNew Jersey 'Exit Tax' (GIT/REP Forms) and the Bulk Sale Notice in a 1031 Exchange
New Jersey's exit tax is an estimated income tax payment at recording. GIT/REP-3 box 7a exempts a 1031 exchange; the buyer's bulk sale notice is separate.
ReadNew York Form IT-2663 for a 1031 Exchange
Nonresidents selling New York real property file Form IT-2663 with the deed. In a 1031 exchange you mark Part 3, box 4B, and the estimated tax is zero.
ReadNorth Carolina Form NC-1099NRS and Nonresident Seller Rules in a 1031 Exchange
North Carolina withholds nothing from nonresident sellers. The buyer files Form NC-1099NRS within 15 days; a 1031 seller is reported but owes no gain tax.
ReadOregon Form OR-18-WC and the 1031 Exemption
Oregon escrow remits the least of 4% of price, 8% of gain or net proceeds for nonresident sellers. A 1031 seller zeroes the gain on line 11 of Form OR-18-WC.
ReadRhode Island Form RI 71.3 Election and the 1031 Exemption
Rhode Island buyers withhold 6% of a nonresident seller's net proceeds, 7% for corporations. File the RI 71.3 Election 20 days before closing.
ReadSouth Carolina Forms I-290 and I-295 in a 1031 Exchange
South Carolina buyers withhold 5.21% (2026) of a nonresident seller's gain. In a deferred exchange the I-295 affidavit and an I-290 replace the payment.
ReadVermont Form RW-171 and the Withholding Certificate for Exchanges
Vermont buyers withhold 2.5% from nonresident sellers and file Form RW-171 within 30 days. A Commissioner's Certificate for a 1031 exchange cuts it to zero.
ReadWest Virginia Form NRAE: Exemption From Nonresident Seller Withholding
West Virginia withholds 2.5% of a nonresident's net payment or 4.58% of gain. Form NRAE, exchange box checked, is due 21 days before closing.
ReadTransfer taxes
California City Transfer Taxes (Los Angeles, San Francisco and Others) in a 1031 Exchange
County transfer tax is $1.10 per $1,000; Los Angeles adds 0.45% plus Measure ULA's 4% or 5.5%, San Francisco up to 6%. A 1031 defers none of it.
ReadConnecticut Conveyance Tax and a 1031 Exchange
Connecticut's conveyance tax is 0.75% to 2.25% state plus 0.25% to 0.5% municipal, paid by the seller on Form OP-236 before recording. A 1031 exchange is not exempt.
ReadDelaware's 4% Transfer Tax and a 1031 Exchange
Delaware's realty transfer tax is 4%: 2.5% state plus 1.5% local, split equally by statute. Like-kind property counts at full value; no 1031 exemption.
ReadFlorida Documentary Stamp Tax (Doc Stamps) and a 1031 Exchange
Florida charges 70 cents per $100 on deeds and 35 cents per $100 on notes and mortgages; Miami-Dade adds a 45-cent surtax. A 1031 exempts neither stamp.
ReadHawaii Conveyance Tax and a 1031 Exchange
Hawaii's conveyance tax runs $0.10 to $1.25 per $100, paid by the seller on Form P-64A within 90 days. A 1031 is not exempt; investor buyers raise the rate.
ReadIllinois, Cook County and Chicago Transfer Taxes in a 1031 Exchange
Illinois stamps are $0.50 per $500, Cook County adds $0.25, Chicago charges $3.75 per $500 to the buyer plus $1.50 to the seller. A 1031 changes none of it.
ReadMassachusetts Deeds Excise Tax and a 1031 Exchange
Massachusetts charges $2.28 per $500 on every deed, $3.24 in Barnstable County, paid by the seller in stamps. A 1031 exchange gets no exemption.
ReadNYC and New York State Transfer Taxes in a 1031 Exchange
A 1031 exchange does not reduce NYC's RPTT of up to 2.625% or the state's 0.4% plus 0.25% transfer tax. Who pays each, the mansion tax tiers, the traps.
ReadPhiladelphia and Pennsylvania Realty Transfer Tax in a 1031 Exchange
Philadelphia's realty transfer tax is 4.578% since July 1, 2025, 3.578% city plus 1% state. No 1031 exclusion; direct deeding avoids a second tax.
ReadVermont Land Gains Tax: Why Only Vermont-for-Vermont Exchanges Escape It
Vermont's land gains tax hits land subdivided within six years of purchase, at 5% to 80% of gain. A 1031 avoids it only if the replacement is Vermont land.
ReadWashington Real Estate Excise Tax (REET) and a 1031 Exchange
Washington's graduated REET of 1.1% to 3% plus local is the seller's tax, and a 1031 does not defer it. Only the facilitator's transfer can be exempt.
ReadWashington, DC Transfer Tax and Recordation Tax in a 1031 Exchange
DC charges 1.1% or 1.45% recordation tax and the same again as transfer tax on every deed. A 1031 exchange earns no exemption, and a reverse exchange can pay twice.
ReadOverview
Exemption Filing Deadlines: States Where the 1031 Withholding Affidavit Must Be Filed Weeks Before Closing
Maryland and West Virginia need the exchange exemption 21 days before closing, Maine at least 5 business days, New Jersey's bulk sale notice 10 business days.
ReadWhich States Withhold Tax at Closing, and How a 1031 Exchange Gets You Out of It
Seventeen states withhold from out-of-state sellers at closing and one more reports the sale. The rates, forms, exemption timing and who files, state by state.
ReadFederal closing paperwork
FIRPTA at Closing: Form 8288-B and the Notice of Nonrecognition for Foreign Exchangers
A foreign seller in a deferred 1031 cannot use the nonrecognition notice; the buyer withholds 15% unless Form 8288-B is filed by closing and held in escrow.
ReadForm 1099-S and Your 1031 Exchange
Who issues Form 1099-S in a 1031 exchange, why box 2a can show the full price or zero, how Form 8824 reconciles the number, and how to answer a CP2000 letter.
ReadReading a Settlement Statement for a 1031 Exchange
How to read a 1031 exchange closing statement: proceeds routed to the intermediary, which charges are exchange expenses, and which payoff and cash lines become boot.
ReadHave a sale in motion?
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