North Carolina
A 1031 exchange in North Carolina, where the buyer reports the sale.
North Carolina does not withhold from nonresident sellers at closing. The buyer reports the sale to the Department of Revenue instead, and the seller's own return does the rest.
North Carolina adds little to an exchange at closing. Nothing is withheld from a nonresident seller; instead the buyer files Form NC-1099NRS within 15 days reporting the sale, and North Carolina follows the federal deferral. The one cost that always applies is the excise tax on the deed, paid by the seller.
onezero3one acts as qualified intermediary for exchanges of North Carolina property, subject to a review of each file before an exchange agreement is signed. We work with your closing agent and tax advisor; we do not give tax or legal advice.
What is specific to this state
The federal rules in IRC §1031 decide whether an exchange qualifies. The items below are state requirements that sit alongside them at closing or on the return. Each links to the official source it was checked against; confirm the current version with your closing agent and tax advisor before relying on it.
| Issue | What applies | Usually handled by | Source |
|---|---|---|---|
| Buyer report instead of withholding | North Carolina does not withhold at closing in the NCDOR materials reviewed. Instead, the buyer of North Carolina real property from a nonresident individual, partnership, estate or trust files Form NC-1099NRS within 15 days of closing, reporting the seller and the gross sales price, and gives the seller a copy. The form has no exception for exchanges. Purchases from nonresident sellers. | Buyer, usually through the closing attorney | NCDOR, Form NC-1099NRS instructions; 17 NCAC 06B .3906 Checked September 30, 2026 |
| Excise tax on deeds | North Carolina's excise tax is $1 per $500 of consideration on each deed, paid by the seller to the register of deeds before recording. The statutory exemptions do not include exchanges; some counties add a local land transfer tax. Every deed. | Closing attorney, charged to the seller | N.C. Gen. Stat. §§105-228.29, 105-228.30 Checked September 30, 2026 |
| State income tax treatment | North Carolina starts from federal adjusted gross income and makes no adjustment for §1031, so a deferred exchange is deferred for North Carolina. The state decoupled from Opportunity Zone deferral, not from like-kind exchanges. Individuals. | Your tax advisor | N.C. Gen. Stat. §§105-153.4, 105-153.5; NCDOR Checked September 30, 2026 |
The buyer's report, NC-1099NRS
When a nonresident individual, partnership, estate or trust sells North Carolina real property, the buyer files Form NC-1099NRS with the Department of Revenue within 15 days of closing, reporting the seller's name and taxpayer identification number, the property, the closing date and the gross sales price, and gives the seller a copy. The form has no exception for exchanges, so expect it to be filed even though your gain is deferred. The closing attorney usually handles it for the buyer and will ask you for your taxpayer identification number.
The report tells the Department that a sale happened. Your own North Carolina return, and your Form 8824, show why no gain was recognized. A nonresident with recognized gain, for example from boot, may also owe estimated tax.
Excise tax on each deed
North Carolina's excise tax is $1 per $500 of consideration, paid by the seller to the register of deeds before the deed is recorded. The statutory exemptions do not include exchanges, and some counties add a local land transfer tax. On a North Carolina replacement purchase, the seller of that property pays it.
State income tax
North Carolina starts from federal adjusted gross income and makes no adjustment for §1031, so a deferred exchange is deferred for North Carolina. The state did decouple from federal Opportunity Zone deferral; that is a different provision and does not affect a 1031 exchange.
Questions North Carolina sellers ask
Does North Carolina withhold tax from a nonresident seller?
Not in the Department of Revenue's materials we reviewed. The buyer files NC-1099NRS; any tax is settled on the seller's return.
Will the buyer still file NC-1099NRS if I am exchanging?
Expect so; the form has no exchange exception.
Who pays the excise tax?
The seller, at $1 per $500, before recording.
Related
Sources
- NCDOR, Form NC-1099NRS: Report of Sale of Real Property by Nonresidents (checked September 30, 2026)
- N.C. Gen. Stat. §105-228.30 (excise tax on conveyances) (checked September 30, 2026)
- N.C. Gen. Stat. §105-228.29 (exemptions) (checked September 30, 2026)
- N.C. Gen. Stat. §105-153.4 (North Carolina taxable income) (checked September 30, 2026)
Selling North Carolina property?
Tell us the county, whether you live in North Carolina, and the closing date.
Discuss your North Carolina exchange