The Los Angeles 1031 exchange market
Los Angeles is one of the highest-value 1031 markets in the country, with heavy exchange volume in apartments, industrial in the Inland Empire and South Bay, and retail and mixed-use across the basin. California's high tax rate makes deferral especially valuable, and many owners exchange out of state.
- Rent-controlled and market-rate apartments
- Industrial and logistics
- Retail and mixed-use
- DSTs for passive replacement
California 1031 exchange tax rules
California taxes capital gains as ordinary income at rates up to 13.3%, the highest in the country. It conforms to §1031, so a valid exchange defers California tax as well as federal tax.
California withholds 3.33% of the sales price on real-estate sales unless an exemption applies, and it enforces a clawback: gain deferred into out-of-state property is tracked on FTB Form 3840 every year.
See the full California guide in our 1031 rules by state for more detail, and always confirm with a tax advisor.
How Los Angeles firms use DeferAlly
- Deadline tracking: every Los Angeles exchange shows live 45-day and 180-day countdowns, and an Urgent Deadlines board flags anything at risk.
- Escrow ledger: record deposits, mark funds received with the holding bank and see estimated interest.
- Identification checks: replacement properties are validated against the three-property, 200% and 95% rules, with map previews comparing relinquished and replacement locations.
- Documents and e-signature: exchange agreements, assignments and designation notices generated and signed in the app.
- Branded client portal: clients see their own deadlines, documents and balance under your firm's name.
- Delivery-tracked updates: email and text clients, closing agents and advisors, and resend in one click if a message fails.
Software for QIs, not a QI
DeferAlly does not act as a Qualified Intermediary and never holds exchange funds, so it never competes with Los Angeles firms for clients. Your brand stays on everything your clients see.
Frequently asked questions
What is the best 1031 exchange software in Los Angeles?
Los Angeles firms choose DeferAlly for automatic deadline tracking, escrow ledgers, identification checks, built-in e-signature and a white-labeled client portal in one modern platform that needs no training.
What are the California rules for a 1031 exchange?
California taxes capital gains as ordinary income at rates up to 13.3%, the highest in the country. It conforms to §1031, so a valid exchange defers California tax as well as federal tax. California withholds 3.33% of the sales price on real-estate sales unless an exemption applies, and it enforces a clawback: gain deferred into out-of-state property is tracked on FTB Form 3840 every year.
What is California's 1031 clawback?
If you exchange California property for property in another state, California keeps the right to tax the deferred California gain when you eventually sell, and you must file Form 3840 annually until then.
Do Los Angeles exchanges follow the same 45-day and 180-day deadlines?
Yes. The federal deadlines apply everywhere: identify replacement property within 45 days of the sale and close within 180 days. DeferAlly calculates both automatically.