1031 Exchange Nevada: Tax Rules, Transfer Tax and QI Licensing

Key takeaways

• Nevada's Department of Taxation says the state "does not impose a state income tax on individuals." A Nevada exchange is about deferring federal tax, which can still be large.
• Nevada charges a real property transfer tax when a deed records. In a county of 700,000 or more people, the combined state rate is $2.55 per $500 of value. In smaller counties, it's $1.95 per $500, plus up to 5 cents more if the county adds it. A 1031 exchange doesn't remove this tax.
• Nevada requires a paid qualified intermediary for an exchange of Nevada property to hold a state license and carry at least $1,000,000 in bonds or deposits.
• If you used to live in California, or still own property there, California's rules can follow you to Nevada. California keeps its claim on gain from California property, and it requires an annual filing when California property is exchanged out of state.
• Nevada sellers can use a Delaware Statutory Trust (DST) interest, which can qualify as like-kind replacement property. Buildings the trust owns in income-tax states may mean nonresident returns in those states.

How does a 1031 exchange work for Nevada property?

A 1031 exchange gets its name from 26 U.S.C. §1031, a section of the federal tax code. If you swap business or investment real estate for more business or investment real estate, the federal tax on your gain waits until a later taxable sale. Deferred means delayed. It doesn't mean wiped out.

Nevada doesn't have its own version of the rule. Because the state has no personal income tax, there's no state gain to defer for an individual. The federal rules are the whole game.

Here are those federal rules, briefly. Before closing, sign up a qualified intermediary (QI) to receive the sale money, since money that reaches your own hands can't be exchanged. Starting the day the sale closes, the clock gives you 45 days to name your possible purchases in a signed writing. The purchase itself has to close within 180 days or your tax return due date (with extensions) for the year of the sale, whichever comes first. For full deferral, the general target is to spend every dollar the QI holds and to buy at least as much value as you sold. Real property in the US and real property outside the US aren't like-kind, so a Nevada building can't be traded for one in Mexico. My full guide to the 1031 exchange rules covers every step.

What follows is what's different, or easy to miss, when the property is in Nevada. To compare Nevada with other states, see my guide to 1031 exchange rules by state.

Which Nevada properties qualify?

The statute protects real estate used in a business or held as an investment. In Nevada, that can include a long-term rental home, an apartment building, a retail strip, a warehouse, raw land held for investment, or an office you own and lease out. The property you buy has to be held the same way.

Flips and lots held for sale

The statute is blunt about one group. Section 1031(a)(2) says, "This subsection shall not apply to any exchange of real property held primarily for sale." So a house you bought to fix and resell quickly, or lots you're subdividing to sell, generally won't qualify. What matters is your intent and how you've treated the property, not the label you put on it.

Short-term rentals and second homes

Some Nevada owners rent a condo or house to visitors part of the year and use it themselves the rest. Whether that property counts as held for investment depends on how much you rent it and how much you use it. The IRS has a safe harbor for these cases, and the federal rules guide I linked above explains it. Review your rental records with your CPA before you list.

Your home

Your primary residence generally isn't investment property. A different rule, Section 121, can exclude up to $250,000 of gain on a qualifying home sale, or $500,000 for many married couples filing jointly. If you've rented out part of your home, or moved out and rented it, ask your CPA how the two rules might work together.

A sample Nevada exchange timeline

This is a hypothetical example. Say a Reno owner closes the sale of a small office building on Thursday, March 12, 2026. Here's how the dates fall.

Now change one fact. Say the sale closed on November 20, 2026, instead. Day 180 would fall in May 2027, after the April 15, 2027 due date of the 2026 return. Without an extension, the exchange period would end on April 15. Filing an extension keeps the full 180 days.

Why do a 1031 exchange if Nevada has no income tax?

It's a fair question. The answer is that the federal tax on a long-held rental can still be big.

What Nevada says about income tax

The Nevada Department of Taxation's page on income tax in Nevada says: "The State of Nevada does not impose a state income tax on individuals." The same page notes that Nevada does levy other taxes, such as sales tax and property tax.

The page also mentions one business-level tax. It says "Nevada does have a Commerce Tax for businesses whose gross revenue exceeds $4 million in a fiscal year." If you sell through a business entity, ask your CPA whether that tax could apply to you. For an individual investor, the main point stands: no state income tax on the gain.

The federal layers still apply

Federal tax on a rental property gain usually comes in three layers:

1. Depreciation-related gain. Each year you owned the rental, you deducted depreciation on the building. When you sell, that piece of the profit is called unrecaptured Section 1250 gain, and 26 U.S.C. §1(h) caps its federal rate at 25%.
2. Long-term capital gain. Whatever profit remains falls in the 0%, 15% or 20% brackets. The IRS's 2026 inflation update, Revenue Procedure 2025-32, starts the 20% rate above $613,700 of taxable income on a joint return and above $545,500 for a single filer.
3. Net investment income tax (NIIT). This extra 3.8% federal tax comes from 26 U.S.C. §1411. It reaches investment income once modified income crosses a threshold: $250,000 on a joint return, $200,000 for most others.

A Nevada seller avoids a state layer. A seller in a high-tax state would add it on top. In the example below, the federal layers alone take about a quarter of the gain.

Worked example: a Henderson rental, with and without an exchange

This is a hypothetical example. The numbers are round, and they don't describe any real client, property or offering. Your CPA should run your actual figures.

The numbers

Say a married couple living in Nevada owns a rental home in Henderson. They sell it in 2026.

• Sale price: $1,500,000
• Selling costs: $75,000
• Purchase price years ago: $800,000
• Depreciation taken: $300,000
• Adjusted basis, which is the purchase price minus depreciation: $500,000
• Mortgage paid off at closing: $400,000

Their gain is $1,500,000 − $75,000 − $500,000 = $925,000.

If they sell and pay the tax

Assume their other income already places them in the top federal brackets.

Their cash at closing is $1,500,000 − $75,000 − $400,000 = $1,025,000. After about $235,150 of federal tax, roughly $789,850 is left to reinvest.

If they exchange

With a QI and a completed exchange, they can defer the $235,150. To defer all of it, they generally:

• Buy replacement property worth at least $1,425,000, which is the sale price minus selling costs, and
• Put all $1,025,000 of cash from the QI into the purchase.

That keeps about $235,000 more working for them. The deferred gain carries into the new property through its basis. If they sell later for cash, the tax comes due then.

If they move to California before selling the replacement

Here is where Nevada's advantage can disappear. California taxes its residents on gain from a sale made while they live there, even when part of that gain was deferred from another state. California's guidance on this is covered in my guide to the 1031 exchange in California. If a move is in your plans, talk with your CPA before you sell, not after.

What is Nevada's real property transfer tax?

Nevada doesn't tax your gain, but it does tax the transfer of the deed. This is a recording cost, not an income tax. A 1031 exchange has no effect on it.

The rates

Nevada's transfer tax is set in Nevada Revised Statutes Chapter 375. It's charged "for each $500 of value or fraction thereof." It has three pieces:

Clark County, home to Las Vegas and Henderson, is far above the threshold, with a Census Bureau estimate of 2,407,226 people as of July 1, 2025. Counties under 700,000 people use the lower rates. Check the current rate with your county recorder before closing, since it can change.

What "value" means

The statute defines value for a normal sale as the full purchase price paid or to be paid. It isn't reduced for the mortgage. A gift or a deed with little or no stated price is valued at estimated fair market value instead.

Who pays

Under NRS 375.030, "The buyer and seller are jointly and severally liable for the payment of the taxes." That means the county can collect from either one. Who actually pays is usually settled in the purchase contract. The same section says the escrow holder isn't liable for the tax.

Worked transfer tax math

This is a hypothetical example. Say you sell a Las Vegas fourplex for $1,500,000 and buy a $2,000,000 building in a Nevada county with fewer than 700,000 people.

Whether you pay either amount depends on your contracts. Either way, budget for it as a closing cost. Ask your QI and CPA whether exchange funds can pay it and how it affects your numbers.

Exemptions to know about

NRS 375.090 lists transfers that are exempt from the tax. NRS 375.090 doesn't list an exemption for 1031 exchanges or for deeds to a QI. A few exemptions matter for investors who restructure before selling:

• A transfer between a business entity and an affiliated entity "if the affiliated business entity has identical common ownership," unless the entity was formed to avoid the tax.
• "A transfer of title to or from a trust without consideration," if a certificate of trust is presented at the time of transfer.
• A transfer to an entity that the person conveying the property owns 100% of.

Moving title before a sale can also create 1031 problems. The taxpayer who sells generally has to be the same taxpayer who buys. Ask your attorney to review any title change before you list.

Does Nevada license 1031 exchange companies?

An exchange company holds your sale money for weeks or months. A QI that fails, or misuses funds, can wreck an exchange. Nevada is one of the states that licenses them.

Under NRS Chapter 645G:

• A license is required. NRS 645G.100 says "a person shall not act as an exchange facilitator unless he or she is licensed as such with the Division." The statute's definition of exchange facilitator includes someone who acts as a QI for Nevada property for pay.
• The Division of Financial Institutions issues the license. It sits in the state's Department of Business and Industry.
• A large bond or deposit is required. NRS 645G.320 calls for a bond of "not less than $1,000,000," or a deposit of the same amount with the Division.
• Acting without a license is a crime. NRS 645G.900 makes it a gross misdemeanor and adds a civil penalty of $200 a day.

So before you sign an exchange agreement for Nevada property, ask the QI for proof of its Nevada license. For the rest of the vetting, such as how the account is set up and who can release funds, read my guide to picking a qualified intermediary.

Do California rules apply to Nevada investors?

Often, yes, if California property is anywhere in your history. California has its own set of rules for property located there, and they don't stop at the state line.

If you sell California property while living in Nevada

California generally withholds tax at closing on California real estate sales. The California Franchise Tax Board's 2026 Form 593 instructions set the standard amount at 3⅓% of the selling price. A seller who is doing a 1031 exchange can certify that on Form 593 and avoid withholding at the first closing.

Your QI still has to withhold in some cases. The FTB's qualified intermediary withholding page says the QI must withhold 3⅓% of boot over $1,500. Boot is cash or other value you receive that isn't like-kind property. The same page requires withholding on the whole sale, at 3⅓% of the price, when the exchange falls apart or doesn't meet the Section 1031 rules.

Living in Nevada doesn't change any of that. The withholding rules follow the property.

If you trade California property for Nevada property

Here's the pattern. You sell a California rental and buy in Nevada. To California, your old property left the state, and that triggers Form FTB 3840.

According to the FTB's instructions for Form 3840, where you live doesn't matter. Residents and nonresidents alike file it, first for the year of the exchange and then for every later year, generally until the deferred gain is taxed.

So a Nevada resident who traded a California rental for a Las Vegas building files a California form every year. That's true even if you have no other reason to file in California. Skipping it is risky: the instructions warn that the FTB can estimate your income and assess tax, with penalties and interest on top.

When you finally sell the Nevada building for cash, California taxes the California part of the deferred gain on a nonresident return. People call this the California clawback. The California guide I linked above explains how California measures its share.

If you trade Nevada property for California property

Now flip it. A Nevada owner sells in Nevada and buys in California.

The FTB's Publication 1100, which covers nonresidents and people who change residency, uses a Nevada resident as its example. In the example, a Nevada resident exchanged Nevada business property for California business property and deferred a $10,000 gain. The California property was later sold for a $50,000 gain. The conclusion: "$40,000 of gain has a California source and is taxable by California."

In plain words, the gain that built up while you owned the Nevada property stayed outside California's reach in that example. The gain that built up on the California property was California's to tax.

Here's a hypothetical with bigger numbers, following the same pattern. It assumes you stay a Nevada resident the whole time. Your CPA should confirm how California would treat your facts.

You'd also face California's withholding rules when you sell the California property, and California property tax and transfer costs while you own it.

If you later move to California

Publication 1100 also makes clear that California residents pay California tax on income from everywhere, not just from California. If you become a California resident and then sell, California can tax the whole gain, including the part deferred from Nevada. Since Nevada had no income tax on that gain, there's no Nevada tax to credit against it.

That's the single most expensive surprise in this section. If there's any chance you'll move back to California, plan the timing of the sale with your CPA first.

Selling in Nevada and buying in another state

Nevada sellers can exchange into real estate anywhere in the United States. The state where the new property sits matters later.

What changes when you buy elsewhere

• Rental income. The state where the property sits may tax nonresidents on income from it. You may need to file a nonresident return there each year.
• The eventual sale. The new state may tax the gain when you sell. California's Publication 1100, for example, says the state "taxes real property based upon where the property is located." Ask your CPA how the new state would treat gain carried over from your Nevada property.
• State exchange forms. Some states have their own forms for exchanges. A Nevada sale doesn't create a Nevada form, but the new state may have its own requirements when you eventually exchange out of it.
• Withholding at the later sale. Some states, including California, withhold tax at closing when property is sold. Ask about it before you buy.

Why some Nevada owners stay in Nevada

Exchanging into another Nevada property keeps the whole picture simple. No new state income tax return, no nonresident filing and no state withholding at sale, at least while you're a Nevada resident. The trade-off is concentration: all your real estate exposure stays in one state's economy.

Can a DST be your Nevada replacement property?

With a Delaware Statutory Trust (DST), dozens or hundreds of investors share ownership of one or more income-producing buildings held in a trust. A real estate company called the sponsor runs it. The IRS addressed DSTs in Revenue Ruling 2004-86, which says "A taxpayer may exchange real property for an interest in the Delaware statutory trust" if the rest of Section 1031 is satisfied. That means a Nevada seller's DST purchase can qualify as replacement property.

For the basics, read my DST guide. Here's what's specific to Nevada sellers.

State filings follow the trust's properties

A trust's buildings can sit in any state. Where one of them is in a state with an income tax, you may owe that state a nonresident return covering your slice of the rent. Get the list of addresses from the sponsor before your 45-day list goes in, and hand it to your CPA.

California property inside a DST

A trust holding California buildings can bring California's withholding and nonresident rules to your share. And selling a California rental to buy into a trust with non-California buildings starts the yearly Form FTB 3840 filing.

Who can invest

DST interests are securities. Most sponsors sell them only to accredited investors, a status defined by the SEC. Per the SEC's investor bulletin on accredited investors, one route is income: over $200,000 in each of the two most recent years, or over $300,000 combined with a spouse or spousal equivalent, plus a reasonable expectation of the same this year. A second route is net worth over $1 million, leaving out your primary home. A third: you hold a Series 7, 65 or 82 license, in good standing. My guide to accredited investor status explains each test in detail.

The risks

A DST interest isn't a savings account. Distributions are not guaranteed and can be cut or stopped. You can lose part or all of what you put in. You have no say in how the property is run or when it's sold. The SEC's Regulation D bulletin calls private placements highly illiquid, which means you can't count on selling when you want to. Fees and leverage can reduce returns. Each one is sold with a private placement memorandum (PPM). That's the offering's disclosure document, and it spells out what you're buying, what you'll pay and what can go wrong. Read all of it.

When the timeline is tight

Because the trust has already bought its buildings, a DST purchase with complete paperwork, funding and approvals can often close within two to three business days. For a Nevada seller near day 180, that speed can matter. It only works if the DST was on the written list delivered by day 45.

Nevada vs. California: how the state rules compare

Here's how the two states differ for a 1031 exchange, based on the primary sources linked in this guide.

The last row matters for married owners. IRS Publication 555 lists Nevada as one of nine community property states. Community property is a system where property acquired during marriage generally belongs to both spouses equally. How you hold title can affect the basis your surviving spouse receives. My guide to the step-up in basis explains why.

Steps for a Nevada 1031 exchange

This is the sequence I'd follow for a Nevada sale. Confirm each step with your CPA, attorney and QI.

Step 1: Estimate the federal tax

Have your CPA price out a taxable sale at the federal level, using your actual purchase price, depreciation history and other income. The size of that bill tells you what an exchange is worth.

Step 2: Ask about California

If you ever owned the property as a California resident, or if the property came from an earlier exchange of California property, find out whether California still has a claim. Bring old FTB 3840 filings to your CPA.

Step 3: Hire a licensed QI

Get proof of a current Nevada license under NRS Chapter 645G. Sign the exchange agreement before closing.

Step 4: Write the exchange into your sale contract

Include a cooperation clause so the buyer agrees to sign what the QI needs. Also settle who pays the transfer tax.

Step 5: Close and have proceeds go to the QI

The money must go from escrow to the QI, not to you. Both deadlines start the day the sale closes.

Step 6: Deliver your 45-day list

Deliver your signed list to the QI by midnight on day 45. Name backups. A backup can only be used later if it was on your written list within 45 days. You can check your dates with my 1031 exchange deadline calculator.

Step 7: Close on the replacement

Close within 180 days or your tax return due date (with extensions) for the year of the sale, whichever comes first. If your sale closes late in the year, file an extension so the earlier return due date doesn't cut your exchange short.

Step 8: Budget for transfer tax on both ends

Plan for transfer tax on the Nevada sale and on the purchase, wherever it is.

Step 9: File the exchange with the IRS

Attach Form 8824 to your federal return covering the sale; it's where the exchange is reported. If California property is part of the chain, ask your CPA which California forms come with it.

Mistakes to avoid in a Nevada exchange

1. Skipping the exchange because Nevada has no income tax. Federal tax on a long-held rental can still be well into six figures.
2. Using an unlicensed QI. Nevada requires a license for a paid QI handling an exchange of Nevada property. Check before you sign.
3. Forgetting California's annual form. If your Nevada property came from an exchange of California property, Form FTB 3840 is due every year.
4. Moving back to California before selling. California taxes residents on all income, so a later sale could be fully taxable there.
5. Ignoring transfer tax. It's a real closing cost on both the sale and the purchase, and exchanges don't change it.
6. Changing title right before the sale. A last-minute deed or entity change can cause 1031 problems and may raise transfer tax questions.
7. Taking cash out without planning for it. Any cash you keep is boot and is taxable federally.
8. Missing the 45-day identification. A slow search doesn't extend the deadline.
9. Buying a DST without asking where its properties are. That decides which state returns you may have to file.
10. Treating the exchange as the end of the tax. It's a deferral. The gain is still there.

Working with me on a Nevada exchange

You can read my background and how my firm is set up. Securities are offered through Aurora Securities, Inc., member FINRA/SIPC, and Baker 1031 Investments is independent of Aurora.

If you're considering a DST as part of a Nevada exchange, I can show you my current offerings and talk through what I like and where I have reservations on each. Tax and legal questions belong with your CPA and attorney, who should be part of the plan from the start.

What my data shows

The figures below come from my offering records as of October 2026, which hold 76 DST offerings from 38 sponsors. Read them as a snapshot, not a forecast for any future offering. The full set is on my DST offering data page.

Where the properties are

Locations span 33 states; the most common are Florida (14), Texas (13), North Carolina (8), Georgia (7).

For a Nevada seller, this is the number to keep in mind. A DST exchange usually means owning property outside Nevada. Each state where a trust owns property has its own tax rules, so ask about locations early.

Leverage and debt replacement

In my offering records as of October 2026, 36 of 76 (47%) are all-cash (no debt), and 16 (21%) have loan-to-value above 50%. The median LTV among leveraged offerings is about 49%. LTV, short for loan-to-value, compares a property's loan with its value.

That matters in an exchange because paying off a mortgage on your Nevada sale generally means taking on equal debt or adding cash on the replacement side. A leveraged DST can help replace debt. An all-cash DST can't, so the difference generally has to be made up with added cash or debt on other replacement property, or it may be taxed as boot.

Minimums, status and hold periods

A long projected hold matters if you might move states during it. A 10-year hold is long enough for a lot of life changes, including a move back to California.

Frequently asked questions

Does Nevada tax the gain when I do a 1031 exchange?

No Nevada income tax applies, because Nevada doesn't tax individuals' income. You still owe Nevada's real property transfer tax when deeds record, and the exchange doesn't change that.

Is a 1031 exchange worth it in a state with no income tax?

It can be, because the federal tax is the larger part of the bill for most sellers. Depreciation-related gain can be taxed at up to 25%, other gain at up to 20%, and the 3.8% net investment income tax may apply too. Your CPA can tell you what deferral is worth for your numbers.

How much is the transfer tax in Las Vegas?

Las Vegas is in Clark County, where the combined state rate under NRS Chapter 375 is $2.55 for each $500 of value. On a $1,000,000 sale, that's about $5,100. Your contract decides whether the buyer or seller pays.

Do exchange companies need a license in Nevada?

Yes. NRS Chapter 645G requires anyone acting as an exchange facilitator for Nevada property to be licensed by the Division of Financial Institutions. It also requires a bond or deposit of at least $1,000,000.

I moved from California to Nevada. Can California still tax my exchange gain?

It can, if the gain came from California property. California keeps that gain tagged as California-source, expects Form FTB 3840 from you every year if you exchanged into property outside California, and can tax the deferred amount when you later sell for cash.

Can I exchange Nevada property for California property?

Yes. Section 1031 treats US real estate as like-kind across states. California may tax gain from the California property when you later sell it, and its withholding and property tax rules apply while you own it.

Can I do a 1031 exchange from Nevada into a DST?

Yes, a DST interest can qualify as replacement property if the Section 1031 rules are met. Most DSTs are offered only to accredited investors, are illiquid, and carry the risk of losing your investment.

Will I have to file taxes in other states if I buy a DST?

Possibly. If the trust owns property in states with an income tax, you may need to file nonresident returns there for your share of the rental income.

What are the deadlines for a 1031 exchange in Nevada?

The federal deadlines apply. You have 45 days to name replacement property in a signed writing and 180 days or your tax return due date (with extensions) for the year of the sale, whichever comes first, to close.

Is Nevada a community property state?

Yes. IRS Publication 555 lists Nevada among nine community property states, which can affect how married couples hold title and the basis a surviving spouse receives.

Before you act

Treat everything here as general education. It's not tax, legal or investment advice, and my firm doesn't offer tax, legal or accounting services. Your CPA, your attorney and your exchange company should each see the plan before you sell, and that goes double if California property is in the picture. DST interests are sold only through a private placement memorandum, are generally limited to accredited investors, can't easily be sold, and can lose some or all of their value. Distributions are not guaranteed.

Sources

• 26 U.S.C. § 1031, Exchange of real property held for productive use or investment (Cornell LII)
• 26 U.S.C. § 1, Tax imposed, including §1(h) capital gains rates (Cornell LII)
• 26 U.S.C. § 1411, Net investment income tax (Cornell LII)
• 26 U.S.C. § 121, Exclusion of gain from sale of principal residence (Cornell LII)
• IRS, Revenue Procedure 2025-32 (2026 inflation adjustments)
• IRS, Revenue Ruling 2004-86
• IRS, About Form 8824, Like-Kind Exchanges
• IRS, Publication 555, Community Property
• Nevada Department of Taxation, Income Tax in Nevada
• Nevada Revised Statutes Chapter 375, Real Property Transfer Tax
• Nevada Revised Statutes Chapter 645G, Exchange Facilitators
• U.S. Census Bureau, QuickFacts: Clark County, Nevada
• California FTB, 2026 Instructions for Form 593, Real Estate Withholding Statement
• California FTB, Qualified intermediary withholding
• California FTB, 2025 Instructions for Form FTB 3840, California Like-Kind Exchanges
• California FTB, 2025 Publication 1100, Taxation of Nonresidents and Individuals Who Change Residency
• Investor.gov, Updated Investor Bulletin: Accredited Investors
• Investor.gov, Private Placements under Regulation D