# 1031 Exchange Oregon: Tax Rates, Withholding and Form OR-24

> Oregon taxes gains up to 9.9%, withholds from nonresident sellers and tracks exchanges into other states on Form OR-24. See how an Oregon exchange works.

Source: https://baker1031.com/learn/1031-exchange-oregon


By Jerry Baker, Founder, Baker 1031 Investments. Updated October 28, 2026. Topic: 1031 Exchanges. Draft for review; not yet approved by Aurora Securities.

## The short answer

A 1031 exchange in Oregon can defer both federal tax and Oregon income tax on the gain from selling investment real estate. Oregon's top rate is 9.9% for tax year 2025, starting at $125,000 of taxable income for single filers and $250,000 for joint filers.

## Key takeaways

- Oregon taxes capital gains as part of your regular taxable income. For tax year 2025, rates run from 4.75% to 9.9%.
- Oregon generally follows the federal deferral. If your exchange meets the federal rules, the Oregon tax is deferred too.
- If you swap Oregon property for property in another state, you file Form OR-24 for the year of the exchange and every year after, until you dispose of the new property.
- Oregon can tax the deferred Oregon gain later, under ORS 316.738, even after you've moved away.
- Nonresident sellers face withholding at closing, but money sent straight to your qualified intermediary isn't counted as proceeds paid to you.
- Portland-area residents may also owe two local income taxes on a taxable gain, which makes deferral worth more there.

## What changes when you do a 1031 exchange in Oregon?

Start with the federal rule. Under [Section 1031](https://www.law.cornell.edu/uscode/text/26/1031), you can trade real property held for investment or business use for other such property and defer the tax on your gain. You must name the new property within 45 days and close within 180 days or your tax return due date (with extensions) for the year of the sale, whichever comes first. A **qualified intermediary**, or QI, holds the money in between. My guide to [the federal 1031 exchange rules](/learn/1031-exchange-rules) walks through those steps.

Oregon adds four things on top:

1. **A real state tax on the gain.** Oregon's rates reach 9.9%, so the state share of the bill is large.
2. **Withholding for nonresidents.** If you don't live in Oregon, the escrow agent may have to hold back tax at closing.
3. **A yearly report when you leave.** Exchanging Oregon property for out-of-state property triggers Form OR-24, year after year.
4. **A claim on the gain later.** Oregon has a statute that can pull the deferred Oregon gain back into Oregon income when the out-of-state property is finally sold.

This page belongs to my larger guide on [how states treat 1031 exchanges](/learn/1031-exchange-by-state). Oregon is one of the states where the state rules carry the most weight.

## How much does Oregon tax a real estate gain?

Oregon taxes your gain as part of your taxable income, using the same rate charts as wages and other income. The [2025 Oregon instructions for nonresident and part-year returns](https://www.oregon.gov/dor/forms/FormsPubs/form-or-40-n_or-40-p-inst_101-048-1_2025.pdf) show these brackets for tax year 2025.

| Filing status | Rate | Taxable income band (tax year 2025) |
|---|---|---|
| Single or married filing separately | 4.75% | Up to $4,400 |
| | 6.75% | $4,400 to $11,100 |
| | 8.75% | $11,100 to $125,000 |
| | 9.9% | Over $125,000 |
| Joint, head of household or surviving spouse | 4.75% | Up to $8,800 |
| | 6.75% | $8,800 to $22,200 |
| | 8.75% | $22,200 to $250,000 |
| | 9.9% | Over $250,000 |

Because a large sale stacks on top of your other income, most of a big gain usually lands in the 9.9% band. Oregon publishes new charts each year, so check the current-year charts when you file.

One narrow exception is worth knowing. Oregon's [Publication OR-17](https://www.oregon.gov/dor/forms/FormsPubs/publication-or-17_101-431_2025.pdf) describes a reduced rate on net long-term capital gain from qualifying sales of farm assets, under ORS 316.045. The sale must end your ownership in the farm business or property. If you own farmland, ask your CPA to compare that rate with an exchange before you list.

### The federal tax comes on top

Oregon tax is only part of the bill. Under [IRS Topic No. 409](https://www.irs.gov/taxtopics/tc409), the federal rates on long-term capital gain are 0%, 15% and 20%, and the IRS page gives the income cutoffs for 2025. Gain tied to past depreciation can be taxed at up to 25%. Then [Section 1411](https://www.law.cornell.edu/uscode/text/26/1411) adds a 3.8% tax on investment income once modified adjusted gross income passes $250,000 for married couples filing together. For most single filers, the line is $200,000.

Put those together and an Oregon seller in the top brackets can owe roughly a third or more of a large gain on a cash sale.

### Portland-area local income taxes

Two local income taxes apply in parts of the Portland area. The [City of Portland Revenue Division](https://www.portland.gov/revenue/personal-tax) administers both.

- **Metro Supportive Housing Services tax:** 1% of taxable income over $125,000 for single filers or $200,000 for joint filers in tax year 2025. For 2026, the thresholds are $128,000 and $205,000.
- **Multnomah County Preschool for All tax:** 1.5% of taxable income over $125,000 (single) or $200,000 (joint), plus another 1.5% over $250,000 (single) or $400,000 (joint).

These apply to residents of the Metro district or Multnomah County, and to nonresidents on income sourced there. A large taxable gain can push a Portland-area seller well into these brackets. Ask your CPA how these local taxes would treat your sale and whether a deferred exchange changes the picture.

## How does Oregon handle an exchange you complete?

Oregon generally follows the federal treatment. There's no separate Oregon exchange to complete. The 2025 Oregon nonresident and part-year return instructions tell filers deferring gain on like-kind property to report the gain to Oregon when it's reported on federal Form 8824.

What changes is the paperwork. The same instructions tell filers to check the "Form OR-24" box and include Form OR-24 with the return. The form matters most when the new property sits outside Oregon.

### When you stay inside Oregon

If you sell a rental in Eugene and buy a warehouse in Salem, the [Form OR-24 instructions](https://www.oregon.gov/dor/forms/FormsPubs/schedule-or-24-instr_101-734-1.pdf) say not to use the form "when exchanging property in Oregon for other property in Oregon." You report the exchange federally on [Form 8824](https://www.irs.gov/forms-pubs/about-form-8824), and Oregon follows.

### When you leave Oregon

If you sell Oregon property and buy property in another state, Form OR-24 comes into play. The instructions say to "use this form only to report the exchange of business and investment property in Oregon for property outside Oregon." You file it "for the tax year that you transferred property" and then "annually thereafter until the disposition of the like-kind property."

Each exchange gets its own form. Filers with no other Oregon filing requirement can submit it through Revenue Online if they have a prior Oregon return on file, according to the same instructions.

## Does Oregon tax deferred gain after you move away?

It can. Oregon has a statute aimed squarely at this situation.

[ORS 316.738](https://www.oregonlegislature.gov/bills_laws/ors/ors316.html) is titled "Modification of taxable income when deferred gain is recognized as result of out-of-state disposition of property." It applies when gain was deferred under Section 1031 or 1033 and the property you received is located outside Oregon.

Here is a simplified summary. Read the [official text](https://www.oregonlegislature.gov/bills_laws/ors/ors316.html) with your CPA before relying on it. When you later dispose of that out-of-state property and the deferred gain is recognized, the statute can require an addition to Oregon taxable income. As the statute is generally read, the add-back is measured by the gap between the property's adjusted basis at the time of the exchange and the lower of two values: its fair market value when the exchange was completed, or its fair market value when the gain is finally recognized.

In other words, Oregon can tax the gain that built up while you owned the Oregon property. If the replacement property later falls in value, the lower value is used. The statute also lets the Department of Revenue require yearly reports, which is where Form OR-24 fits.

People often call this kind of rule a "clawback." California has a similar system with Form FTB 3840.

### A hypothetical, with the formula applied

This is a made-up example that applies the simplified summary above. Applying the statute to real facts is a job for your CPA.

Say you live in Portland. You own a small apartment building with an adjusted basis of $500,000. In 2026 you exchange it, with no cash out, into a building in Arizona worth $1,500,000. Your basis in the Arizona building carries over at $500,000.

You then move to Arizona. In 2034, you sell the Arizona building for cash at $1,800,000.

- Fair market value at the exchange: $1,500,000
- Fair market value at the later sale: $1,800,000
- The lower of the two: $1,500,000
- Minus adjusted basis at the exchange: $500,000
- **Amount Oregon may add to Oregon income: $1,000,000**

The extra $300,000 of growth after you left isn't part of Oregon's add-back under this formula. If the building had instead sold for $1,200,000, the lower value would be $1,200,000, and the add-back would be $700,000.

You'd file an Oregon nonresident return for that year. Keep every year's Form OR-24, your exchange statements and a record of the exchange-date value. Those papers become your proof years later.

## What is Oregon's withholding rule for nonresident sellers?

If you don't live in Oregon and you sell Oregon real estate, the escrow agent may have to send part of your proceeds to the state.

Oregon law (ORS 314.258) and the [Form OR-18-WC instructions](https://www.oregon.gov/dor/forms/FormsPubs/form-or-18-wc-instructions_101-284-1.pdf) set the amount. The agent submits the smallest of three figures:

- "Four percent of the consideration (sales price)"
- "The net proceeds disbursed to the transferor"
- "Eight percent of the gain that is includable in Oregon taxable income"

The instructions say agents don't have to submit payments when the total sales price is $100,000 or less. An individual who is an Oregon resident is exempt.

### How an exchange changes the math

The instructions include an example of a seller in a like-kind exchange. The escrow agent forwards part of the money due to the seller "to a qualified intermediary." Only the amount actually paid out to the seller goes on the net proceeds line.

That's the key point for exchangers. Money that goes straight to your QI isn't proceeds disbursed to you. In a full exchange, where no cash comes to you, net proceeds can be zero, and so the smallest of the three figures can be zero.

### A hypothetical withholding example

Say you live in California and sell a Bend rental for $900,000. Your realized gain is $400,000. Here are two versions.

| Scenario | 4% of price | 8% of Oregon gain | Net proceeds to you | Amount withheld (smallest) |
|---|---|---|---|---|
| Full exchange, all money to the QI | $36,000 | $0 (no gain includable) | $0 | $0 |
| You take $50,000 cash; that $50,000 is your taxable gain | $36,000 | $4,000 | $50,000 | $4,000 |

In the second row, the gain includable in Oregon income is only the $50,000 you took. So 8% of that, or $4,000, is the smallest figure. Withholding isn't an extra tax. It's a prepayment you claim on your Oregon nonresident return, Form OR-40-N.

The seller completes parts of Form OR-18-WC and gives it to the escrow agent. The [Oregon guide for nonresident sellers, Publication OR-NR-REAL](https://www.oregon.gov/dor/forms/FormsPubs/publication_or-nr-real_101-023.pdf), says you keep your copy with your tax records rather than filing it yourself. It also reminds sellers that a return may still be due even if no tax was withheld.

## Oregon resident, nonresident or part-year: how the rules compare

Where you live on the day you sell changes which Oregon rules apply. This table summarizes the general picture.

| Question | Oregon resident | Nonresident selling Oregon property | Part-year resident |
|---|---|---|---|
| Is the gain on Oregon property taxable in Oregon? | Yes, as part of all your income | Yes, as Oregon-source income | Yes, under part-year rules |
| Return form | OR-40 | OR-40-N | OR-40-P |
| Withholding at closing | Exempt as a resident individual | Smallest of 4% of price, 8% of gain or net proceeds | Depends on residency on the closing date |
| Form OR-24 if the new property is outside Oregon | Yes, every year until disposition | Yes, every year until disposition | Yes, every year until disposition |
| Oregon claim on the gain after you leave | ORS 316.738 can apply | ORS 316.738 can apply | ORS 316.738 can apply |

The Oregon Department of Revenue's [personal income tax page](https://www.oregon.gov/dor/programs/individuals/pages/PIT.aspx) says "the income tax for nonresidents is based on taxable income from Oregon sources." The 2025 nonresident instructions list the sale of Oregon property as Oregon-source income.

## What other Oregon rules affect real estate exchanges?

### No new local transfer taxes

A transfer tax is a charge some places collect when property changes hands. Oregon law limits it. [ORS 306.815](https://www.oregonlegislature.gov/bills_laws/ors/ors306.html) says a city, county or district "shall not impose" a tax or fee on the transfer of a fee estate in real property. The ban doesn't apply to a tax whose law was "in effect and operative on March 31, 1997." So ask your escrow officer whether an older local transfer tax applies where you're selling or buying.

### How property tax works on Oregon replacement property

Oregon replacement property is taxed under the state's Measure 50 system. The Department of Revenue's [maximum assessed value manual](https://www.oregon.gov/dor/forms/FormsPubs/maximum-assessed-value-manual_303-438.pdf) says "MAV growth is limited to 3 percent per year" and that assessed value "equals either MAV or RMV, whichever is less." RMV is real market value.

That's a different system from many states, where the tax value resets to the sale price. In Oregon, the assessed value doesn't simply jump to your purchase price. Ask the county assessor's office for the current assessed value and tax history before you identify a property.

### Rules for exchange facilitators

Oregon regulates the companies that hold exchange money. [ORS chapter 673](https://www.oregonlegislature.gov/bills_laws/ors/ors673.html) has sections on exchange facilitators, including a "duty to maintain bonds or deposits," a "duty to maintain insurance or deposits," "custodial duties," and "prohibitions." My guide on [choosing a qualified intermediary](/learn/qualified-intermediary) explains how to ask a QI how your money is held.

### The Oregon estate tax

Oregon has its own estate tax, separate from the federal one. The [Department of Revenue's estate tax page](https://www.oregon.gov/dor/programs/individuals/pages/estate.aspx) says a return is required if an Oregon resident's estate is valued at $1,000,000 or more. Nonresidents with an estate of $1,000,000 or more that includes Oregon real property must file too.

That threshold is low compared with the federal exemption. If you plan to hold exchanged property until death for a basis step-up, talk with an estate attorney about Oregon's tax as well.

## A worked example: an Oregon seller's full tax bill

The numbers below are made up to show the math. No real client, property or offering is behind them, and they aren't tax advice. They use the 2025 Oregon rate chart and ignore Oregon's federal tax subtraction and other adjustments, so the real figure will differ.

### The facts

Say you're single and live in Bend, outside the Portland-area tax districts. Your other taxable income is $100,000. You bought a fourplex for $700,000 and took $200,000 of depreciation, so your adjusted basis is $500,000.

You sell it for $1,200,000, with $60,000 of selling costs. Your gain is $1,200,000 − $60,000 − $500,000 = **$640,000**.

### Oregon tax on a cash sale

Without the sale, your Oregon taxable income is $100,000. Using the 2025 single chart, that's $661 plus 8.75% of $88,900, or about **$8,440**.

With the sale, your Oregon taxable income is $740,000. That's $10,627 plus 9.9% of $615,000, or about **$71,512**.

The sale adds roughly **$63,072** of Oregon tax.

### Federal tax on a cash sale

Assume top federal brackets for simplicity:

- Depreciation portion: $200,000 × 25% = $50,000
- Remaining long-term gain: $440,000 × 20% = $88,000
- Net investment income tax: $640,000 × 3.8% = $24,320
- **Federal total: about $162,320**

### The combined picture

| Tax | Cash sale (hypothetical) | Full 1031 exchange |
|---|---|---|
| Federal | About $162,320 | Deferred |
| Oregon | About $63,072 | Deferred |
| Portland-area local taxes | $0 (Bend is outside the districts) | Not applicable |
| **Total due now** | **About $225,392** | **$0 if every rule is met** |

### The same sale in Portland

Now move the same seller to a home inside both the Metro district and Multnomah County. Using the 2025 thresholds and treating taxable income as $740,000 with the sale and $100,000 without:

- Metro tax: 1% × ($740,000 − $125,000) = $6,150
- Preschool for All, first tier: 1.5% × ($740,000 − $125,000) = $9,225
- Preschool for All, second tier: 1.5% × ($740,000 − $250,000) = $7,350

That's about **$22,725** more, and the total rises to roughly $248,117. Local taxes have their own definitions of taxable income, so treat this as an illustration only.

### If the exchange goes out of state

Suppose you exchange the full amount into a DST that owns property in Texas. Oregon still tracks the gain. You file Form OR-24 every year, and ORS 316.738 can bring the deferred Oregon gain back into Oregon income when you finally sell for cash.

## How do you complete a 1031 exchange from Oregon, step by step?

Here is a practical order, with the Oregon checks folded in.

### Step 1: Pin down your residency

Are you an Oregon resident, a nonresident or a part-year resident on the expected closing date? The answer drives withholding and which return you'll file.

### Step 2: Ask your CPA to estimate both taxes

Have your CPA estimate federal and Oregon tax on a cash sale, plus any Portland-area local tax. That number tells you how much the exchange is worth to you.

### Step 3: Hire a QI before closing

Choose your QI early, sign the exchange agreement, and confirm how your money will be held. Oregon regulates exchange facilitators, but you should still ask direct questions about bonds, insurance and account controls.

### Step 4: Handle the withholding form

If you're a nonresident, complete Form OR-18-WC with your escrow agent. Show that the exchange money goes to the QI, not to you, so the net proceeds figure is right.

### Step 5: Close and mark your deadlines

Your 45-day identification period and your 180-day closing period start when the sale closes. You must close within 180 days or your tax return due date (with extensions) for the year of the sale, whichever comes first.

### Step 6: Identify in writing by day 45

Give your QI a signed, written list of replacement properties. Describe each one so there's no doubt which property you mean. A backup choice only helps if it was on that written list within 45 days.

### Step 7: Decide in-state or out-of-state

If the replacement is in Oregon, Form OR-24 doesn't apply. If any of it is outside Oregon, plan on filing Form OR-24 for years, and know that ORS 316.738 can apply later.

### Step 8: Finish the purchase of the replacement

Your QI sends the money to the seller or sponsor. Keep the settlement statements and a record of the property's value on the exchange date.

### Step 9: File the federal and Oregon forms

Report the exchange on Form 8824 with your federal return. On your Oregon return, check the Form OR-24 box and attach the form if the new property is outside Oregon.

### Step 10: Keep filing every year

Set a reminder to file Form OR-24 each year until you dispose of the out-of-state property. Missing years makes your records harder to prove later.

## What records should you keep for an Oregon exchange?

Oregon's rules can reach years into the future. That makes your paperwork more important than in most states. If ORS 316.738 applies a decade from now, you'll need to prove numbers from today.

Here is a simple checklist to keep in one folder, paper or digital.

| Record | Why it matters in Oregon |
|---|---|
| Settlement statement for the Oregon sale | Shows the price, costs and the money sent to your QI |
| Exchange agreement and QI statements | Shows you never had access to the money |
| Written 45-day identification | Proves which properties you named, and when |
| Settlement statement for the replacement | Shows the price and the date the exchange was completed |
| Evidence of value on the exchange date | The Oregon formula uses this value; an appraisal or purchase price helps |
| Federal Form 8824 for the exchange year | The starting point for Oregon's treatment |
| Every year's Form OR-24 | Shows you met the yearly reporting duty |
| Form OR-18-WC, if you were a nonresident | Shows any amount withheld and claimed on your return |
| Depreciation schedules | Your adjusted basis depends on them |

Keep these until several years after you finally sell the last replacement property for cash. Ask your CPA how long to hold them after that.

### Why the value on the exchange date matters

The ORS 316.738 formula compares two values and uses the lower one. One of them is the value when the exchange was completed. If you can't show that number, you may have a harder time if the state later asks how you figured the add-back. A purchase price from an arm's-length deal is often good evidence. An appraisal can help when the price doesn't tell the whole story, such as in a DST, where you buy a share of a larger property.

### Keep records if you move

People who leave Oregon often stop thinking about it. But the yearly Form OR-24 doesn't stop when you move. Keep your Oregon folder with your other tax papers, and tell your new CPA about it.

## Where do DSTs fit for Oregon investors?

A **Delaware Statutory Trust**, or DST, is a trust that holds real estate for many investors at once. Each investor owns a fractional interest. The IRS addressed these trusts in [Revenue Ruling 2004-86](https://www.irs.gov/pub/irs-drop/rr-04-86.pdf), which says "A taxpayer may exchange real property for an interest in the Delaware statutory trust" when the rest of Section 1031 is satisfied. On that basis, a DST interest can qualify as replacement property. My [Delaware Statutory Trust guide](/learn/dst-guide) explains the structure.

For an Oregon seller, a DST raises a few specific points.

### When the DST's property is outside Oregon

DST properties can be anywhere. If the trust owns property outside Oregon, your exchange is an Oregon-for-out-of-state exchange. That means Form OR-24 every year and possible Oregon tax later under ORS 316.738.

### State returns where the trust owns property

A DST passes income through to its investors. When the trust's building sits in a state that taxes income, expect that state to want a nonresident return covering your share of the rent. I explain this in my guide to [DST tax reporting](/learn/dst-tax-reporting-depreciation-and-pass-through-income).

### Who can invest

DSTs are private securities offerings, and most accept only accredited investors. The [SEC's investor bulletin on accredited investors](https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/updated-3) describes the main tests. One test is income: more than $200,000 in each of the two most recent years, or more than $300,000 jointly with a spouse or spousal equivalent, plus a reasonable expectation of the same this year. Another is net worth over $1 million, leaving out the value of your main home. Holding a Series 7, Series 65 or Series 82 license that is in good standing also qualifies.

### What you give up

A DST interest is illiquid. The SEC's [private placement bulletin](https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/private) warns that "an investment in a private placement is highly illiquid." You don't control when the property sells. Distributions are not guaranteed; a sponsor can cut them or halt them. Property prices move in both directions, and your whole investment is at risk of loss.

## Mistakes to avoid in an Oregon exchange

Common errors in Oregon sales include these.

1. **Forgetting Form OR-24 after the first year.** The form is due every year until you dispose of the out-of-state property, not just once.
2. **Assuming a move ends Oregon's claim.** ORS 316.738 can pull the deferred Oregon gain back into Oregon income after you leave.
3. **Losing the exchange-date value.** The Oregon formula uses the value when the exchange was completed. Keep an appraisal or closing statement that shows it.
4. **Letting cash pass through your hands.** Money paid to you counts as net proceeds for withholding, and it can also break the federal exchange.
5. **Skipping Form OR-18-WC as a nonresident.** Without it, the escrow agent may withhold more than needed.
6. **Ignoring Portland-area local taxes.** For Metro or Multnomah County residents, these add to the tax a cash sale would trigger.
7. **Expecting the tax value to reset on an Oregon purchase.** Oregon's assessed value works differently from many states. Check the assessor's records.
8. **Overlooking the Oregon estate tax.** The $1,000,000 filing threshold can reach estates that owe no federal estate tax.
9. **Choosing a QI without asking how funds are held.** State rules help, but your own questions matter more.
10. **Treating a DST as cash-like.** DSTs are long-term, illiquid investments with real risk of loss.

## When might a cash sale make more sense?

An exchange defers tax. It doesn't fit every seller. Consider a taxable sale if:

- **You want the money out of real estate.** An exchange keeps it in real estate.
- **You need most of the cash.** Cash you keep is generally taxed.
- **Your gain is modest.** The cost and effort may outweigh the deferral.
- **You plan to leave Oregon and simplify.** Years of Form OR-24 filings and a future Oregon claim are a real burden. Some sellers prefer to pay and be done.
- **You qualify for a better result on farm property.** Compare the farm liquidation rate with an exchange.

Your CPA can lay out both paths with your real numbers.

## How I help Oregon investors

I'm Jerry Baker, the founder of Baker 1031 Investments, based in San Francisco with an office in Los Angeles; [here's more about me](/about).

I focus on the investment side of an exchange. I don't give tax, legal or accounting advice, and Oregon's forms belong with your CPA. When we talk, I'll ask where you live, where you might move and how much of your equity you're thinking of placing in DSTs. Then we'll look at [current DST offerings](/invest) together. For each one, I'll explain why I'm considering it, what I like about it, and where I have reservations.

Securities are offered through Aurora Securities, Inc., member FINRA/SIPC. Baker 1031 Investments is independent of Aurora.

## What my data shows

For this page I pulled from [my offering records](/data/dst-offerings) as of October 2026, which span 76 DST offerings from 38 sponsors. They describe offerings I track. They don't predict what any future offering will look like.

### Where DST properties sit

For an Oregon seller, location is the stat that matters most: **Locations span 33 states; the most common are Florida (14), Texas (13), North Carolina (8), Georgia (7).**

Oregon isn't among the most common locations. So many of the DSTs you might consider will hold property outside Oregon. That makes your exchange an Oregon-for-out-of-state exchange, with Form OR-24 filings each year and the ORS 316.738 rule in the background.

### Other figures from the records

| Oregon-relevant item | My offering records as of October 2026 |
|---|---|
| Minimum investment | Median $100,000; ranges from $25,000 to $500,000; 21 offerings (28%) start at $25,000 |
| Leverage | 36 of 76 (47%) are all-cash (no debt); median loan-to-value (LTV) among leveraged offerings is about 49% |
| Projected hold | 10 years is the most common (31 offerings); others 5–10 years, 7 years, and a few 2-year programs |
| 721 exits (UPREIT) | 44 (58%) optional, 13 (17%) mandatory, 17 (22%) none, 2 unclear |

The hold period matters here. A 10-year hold can mean a decade of Form OR-24 filings before the property sells. LTV, or loan-to-value, is the loan divided by the property's value. A **721 exit** is a path where a REIT (real estate investment trust, a company that owns income-producing real estate) may later take the DST property through its operating partnership (the entity that holds the REIT's properties) in exchange for partnership units, called OP units. Those units can't be used in a further 1031 exchange.

## Frequently asked questions

### Does Oregon tax capital gains on real estate?

Yes. Oregon taxes capital gains as part of your taxable income, at rates up to 9.9% for tax year 2025. A completed 1031 exchange defers that tax along with the federal tax.

### What is Oregon Form OR-24?

Form OR-24 reports an exchange of Oregon business or investment property for property outside Oregon. You file it for the year of the exchange and every year after until you dispose of the out-of-state property.

### Is Oregon a clawback state?

Oregon has a statute, ORS 316.738, that can add deferred Oregon gain back into Oregon income when the out-of-state replacement property is sold in a taxable sale. Combined with the yearly Form OR-24, that works much like California's clawback system.

### Do I file Form OR-24 if I buy my replacement property in Oregon?

No. The instructions say not to use the form when exchanging Oregon property for other Oregon property. You still report the exchange on federal Form 8824.

### How much does Oregon withhold when a nonresident sells?

The escrow agent submits the smallest of 4% of the sales price, 8% of the gain includable in Oregon income, or the net proceeds paid to you. No payment is required when the sales price is $100,000 or less.

### Does withholding apply to money sent to my qualified intermediary?

Money forwarded to your QI isn't counted as net proceeds paid to you. In a full exchange with no cash to you, the withholding can be zero.

### If I move to Washington or Nevada, can Oregon still tax my deferred gain?

It can. ORS 316.738 can apply when you later sell the out-of-state property, and you keep filing Form OR-24 until then. My [Washington 1031 exchange guide](/learn/1031-exchange-washington) covers that state's own rules.

### Do Portland's local income taxes apply to a gain from selling property?

The Metro and Multnomah County taxes apply to taxable income above set thresholds, and a taxable gain is part of taxable income. Ask your CPA how they apply to your sale and to a deferred exchange.

### Does Oregon have a real estate transfer tax?

Oregon law bars cities, counties and districts from adding new transfer taxes. Local taxes in effect on March 31, 1997 were left in place, so ask your escrow officer about the county where you're selling or buying.

### Will buying a DST from an Oregon sale trigger Form OR-24?

It will if the trust's property is outside Oregon, because that makes it an exchange of Oregon property for out-of-state property. A DST interest can qualify as replacement property under IRS Revenue Ruling 2004-86 when the federal rules are met, but the yearly Oregon filing still applies.

## Before you act

Please treat this page as general education, not tax, legal or investment advice. Oregon's rules change, and your facts matter, so review your plan with a CPA, an attorney and your qualified intermediary before you sign anything. DSTs are offered only through a private placement memorandum to eligible investors, and every DST investment can lose value, including all of it.

## Sources

- [26 U.S.C. § 1031, Exchange of real property held for productive use or investment (Cornell LII)](https://www.law.cornell.edu/uscode/text/26/1031)
- [26 U.S.C. § 1411, Net investment income tax (Cornell LII)](https://www.law.cornell.edu/uscode/text/26/1411)
- [IRS, Topic No. 409, Capital gains and losses](https://www.irs.gov/taxtopics/tc409)
- [IRS, About Form 8824, Like-Kind Exchanges](https://www.irs.gov/forms-pubs/about-form-8824)
- [IRS Revenue Ruling 2004-86](https://www.irs.gov/pub/irs-drop/rr-04-86.pdf)
- [Oregon Department of Revenue, 2025 Form OR-40-N and OR-40-P Instructions](https://www.oregon.gov/dor/forms/FormsPubs/form-or-40-n_or-40-p-inst_101-048-1_2025.pdf)
- [Oregon Department of Revenue, Publication OR-17 (2025)](https://www.oregon.gov/dor/forms/FormsPubs/publication-or-17_101-431_2025.pdf)
- [Oregon Department of Revenue, Form OR-24 Instructions](https://www.oregon.gov/dor/forms/FormsPubs/schedule-or-24-instr_101-734-1.pdf)
- [Oregon Department of Revenue, Form OR-18-WC Instructions](https://www.oregon.gov/dor/forms/FormsPubs/form-or-18-wc-instructions_101-284-1.pdf)
- [Oregon Department of Revenue, Publication OR-NR-REAL](https://www.oregon.gov/dor/forms/FormsPubs/publication_or-nr-real_101-023.pdf)
- [Oregon Department of Revenue, Personal Income Tax](https://www.oregon.gov/dor/programs/individuals/pages/PIT.aspx)
- [Oregon Department of Revenue, Estate Tax](https://www.oregon.gov/dor/programs/individuals/pages/estate.aspx)
- [Oregon Department of Revenue, Maximum Assessed Value Manual](https://www.oregon.gov/dor/forms/FormsPubs/maximum-assessed-value-manual_303-438.pdf)
- [Oregon Revised Statutes, Chapter 316 (including ORS 316.738)](https://www.oregonlegislature.gov/bills_laws/ors/ors316.html)
- [Oregon Revised Statutes, Chapter 306 (including ORS 306.815)](https://www.oregonlegislature.gov/bills_laws/ors/ors306.html)
- [Oregon Revised Statutes, Chapter 673 (including ORS 673.800 to 673.825)](https://www.oregonlegislature.gov/bills_laws/ors/ors673.html)
- [City of Portland Revenue Division, Personal Tax (Metro SHS and Multnomah County PFA)](https://www.portland.gov/revenue/personal-tax)
- [Investor.gov, Updated Investor Bulletin: Accredited Investors](https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/updated-3)
- [Investor.gov, Private Placements under Regulation D](https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins/private)

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Securities are offered through Aurora Securities, Inc., member FINRA/SIPC. Baker 1031 Investments, LLC is independent of Aurora Securities, Inc. and is not a registered broker-dealer or investment adviser. This content is general education, not investment, tax, or legal advice, and is not an offer to buy or sell securities. Offers are made only through the offering documents to eligible investors, generally accredited investors. DST interests are illiquid, distributions are not guaranteed, and you can lose your entire investment.

Contact: Jerry Baker, Baker 1031 Investments · hello@baker1031.com · (415) 965-0552 · https://baker1031.com/contact