Pennsylvania and Like-Kind Exchanges

Effective January 1, 2023

Effective January 1, 2023, Pennsylvania will recognize 1031 exchanges. House Bill 1342 was signed by Governor Tom Wolf on July, 8, 2022 and codified the tax deferral benefit of like-kind exchanges beginning in the 2023 tax year. Pennsylvania income tax will be due on exchanges initiated in 2022.

Through December 31, 2022

Except for c-corporations, Pennsylvania law does not contain a provision similar to IRC §1031. Therefore property exchanges resulting in gain or income are subject to Pennsylvania tax. Income tax is due from residents of Pennsylvania regardless of where the property is located and non-residents selling property located in Pennsylvania.