1031 Like-Kind Exchange in Vermont 2026
Calculate your 1031 like-kind exchange tax savings in Vermont. With Vermont's 8.75% top state tax rate, your combined savings are higher.
The 1031 Like-Kind Exchange for Vermont residents in 2026 has a maximum deduction of $30,000 with average savings of $30,000/year. Vermont stacks state tax savings at the 8.75% top marginal rate, increasing your combined federal + state savings. Required IRS forms: Form 8824. Eligibility: Real estate investors exchanging investment properties
Vermont Tax Overview
Four brackets to 8.75%. High property taxes (1.83%). Estate tax ($5M). VT business/farm capital gains exclusion.
Vermont Income Tax Brackets (Single)
1031 Like-Kind Exchange Savings Calculator for Vermont
Federal Savings
$1,100
22% bracket
Vermont State
$330
6.6% rate
Total Savings
$1,430
28.6% combined
At a 28.6% combined tax rate in Vermont, every $1,000 in deductions saves you $286 in taxes.
Savings by Tax Bracket in Vermont
Includes 6.6% Vermont state tax on top of federal savings.
Eligibility Requirements
Real estate investors exchanging investment properties
- 1Real property only
- 245-day identification
- 3180-day completion
Vermont residents should verify that this deduction is also recognized on their state tax return for additional savings of up to 8.75%.
Common Mistakes to Avoid
- !Missing deadlines
- !Using for personal residence
- !Forgetting to claim the deduction on your Vermont state return (missing up to 8.75% additional savings)
Vermont Filing Tips
High rates make pre-tax contributions important. Use 40% capital gains exclusion on VT business/farm sales. EITC at 38% of federal. Homeowner and Renter Rebate programs offset property taxes.
Required Tax Forms
File these forms with your federal tax return to claim the 1031 like-kind exchange. Vermont may require additional state-specific forms.
Other Tax Deductions in Vermont
Capital Loss Deduction
Investment
Tax-Loss Harvesting
Investment
Investment Interest Expense
Investment
Qualified Dividend Tax Rate
Investment
Opportunity Zone Investment
Investment
QSBS Exclusion (Section 1202)
Investment
Installment Sale
Investment
NIIT Planning (3.8% Surtax)
Investment
1031 Like-Kind Exchange in Neighboring States
Calculate Your Full Tax Savings in Vermont
Use our free tax calculators to optimize your entire tax return for Vermont.
Frequently Asked Questions
How much can I save with the 1031 Like-Kind Exchange in Vermont?
In Vermont, the 1031 like-kind exchange can save you an estimated $1,430 per year on a $5,000 deduction. This includes $1,100 in federal tax savings and $330 in Vermont state tax savings at the 6.6% marginal rate. The national average savings is $30,000/year.
What is the Vermont state income tax rate?
Vermont has a progressive income tax system with a top rate of 8.75%. Four brackets to 8.75%. High property taxes (1.83%). Estate tax ($5M). VT business/farm capital gains exclusion.
Who qualifies for the 1031 Like-Kind Exchange in Vermont?
Real estate investors exchanging investment properties. The eligibility requirements are the same whether you live in Vermont or another state, as this is a federal tax deduction. However, your total savings will vary based on Vermont's 8.75% top state tax rate.
What tax forms do I need to claim the 1031 Like-Kind Exchange in Vermont?
To claim the 1031 like-kind exchange, you need to file Form 8824 with your federal return. Vermont residents should also check if the state allows this deduction on their state return for additional savings of up to 8.75%. Filing status affects your deduction limits and tax bracket.
Is the 1031 Like-Kind Exchange better in Vermont than in states without income tax?
Yes, Vermont residents benefit more because the state's 8.75% top income tax rate means the deduction reduces both your federal AND state tax liability. In states with no income tax (like Texas, Florida, or Nevada), this deduction only reduces federal taxes. Your combined rate of 28.6% means more savings per dollar deducted.
What is the standard deduction in Vermont for 2026?
Vermont's standard deduction is $7,000 for single filers and $14,050 for married filing jointly. High rates make pre-tax contributions important. Use 40% capital gains exclusion on VT business/farm sales. EITC at 38% of federal. Homeowner and Renter Rebate programs offset property taxes.
Can I claim the 1031 Like-Kind Exchange if I'm self-employed in Vermont?
Yes, Vermont self-employed individuals can claim the 1031 like-kind exchange provided they meet the federal eligibility requirements (Real estate investors exchanging investment properties). Self-employed filers report on Schedule C and may need Form 8824. Vermont's 8.75% top state tax rate stacks on top of federal SE tax (15.3% combined Medicare + Social Security).
What's the difference between the 1031 Like-Kind Exchange federal vs Vermont state treatment?
The 1031 Like-Kind Exchange is a FEDERAL deduction — federal eligibility rules apply uniformly nationwide. Vermont's difference is at the state-level conformity: most states "couple" with federal AGI calculations, meaning the deduction reduces your Vermont taxable income too. Vermont top state rate is 8.75%, so each $1,000 of federal-deductible expense saves you an additional $88 in Vermont state tax. Some states "decouple" from federal — verify Vermont's 2026 state tax form for confirmation.
Are there income limits or phase-outs for the 1031 Like-Kind Exchange in 2026?
Federal phase-outs depend on your modified adjusted gross income (MAGI) — high-income filers may see reduced or fully phased-out benefits. Check IRS Publication 8824 for the 2026 phase-out thresholds. Vermont state-level conformity means the same federal phase-out reduces your state benefit proportionally at the 8.75% top marginal rate.
What records should I keep for the 1031 Like-Kind Exchange in case of an IRS audit?
Keep these records for at least 3 years after filing (6 years if you under-reported income substantially): receipts, invoices, bank/credit card statements showing the expense, Form 8824 as filed, and any correspondence from payors or institutions. Common mistakes that trigger audit scrutiny include: Missing deadlines; Using for personal residence. Digital scans are accepted by the IRS — back them up to cloud storage with date-stamped filenames.
Related Calculators
Capital Loss Deduction in Vermont
Avg savings: $660/year
Tax-Loss Harvesting in Vermont
Avg savings: $5,000/year
Investment Interest Expense in Vermont
Avg savings: $1,500/year
Qualified Dividend Tax Rate in Vermont
Avg savings: $3,000/year
Income Tax Calculator
Estimate your full federal tax bill
Vermont Tax Brackets
Vermont state income tax rates
Tax Bracket Calculator
Find your marginal bracket