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Ohio

A 1031 exchange of Ohio property, step by step.

Ohio follows the federal result through its income tax, keeps the gain on Ohio real property sourced to Ohio, and collects its conveyance fee at the county auditor on every deed.

Updated September 30, 2026 · Reviewed by onezero3one professional staff on September 30, 2026

An exchange of Ohio investment property works under the federal rules, and Ohio's income tax follows the federal result because it starts from federal adjusted gross income. The practical Ohio items are the conveyance fee on each deed and, for owners who live elsewhere, the fact that gain on Ohio real property remains Ohio's to tax when it is eventually recognized.

onezero3one acts as qualified intermediary for exchanges of Ohio 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.

State items for an exchange (researched September 30, 2026)
IssueWhat appliesUsually handled bySource
Conveyance feeOhio's conveyance fee has two parts: a mandatory $1 per $1,000 collected by the county auditor (R.C. 319.54), and a county transfer tax of up to 30 cents per $100 levied on the seller (R.C. 322.02). The exemptions in R.C. 319.202 do not mention exchanges.
Every deed; the county rate varies.		Closing agent, filing the statement of value with the county auditorOhio Revised Code §322.02 (eff. Apr. 9, 2025)
Checked September 30, 2026
State income tax treatmentOhio adjusted gross income starts from federal adjusted gross income (R.C. 5747.01(A)), so federal §1031 deferral carries through. For nonresidents, gain on real property located in Ohio is allocated to Ohio when it is recognized (R.C. 5747.20(B)(2)(a)). No closing-time withholding for nonresident sellers and no annual reporting form for out-of-state replacement property were found.
Individuals; municipal income taxes were not researched.		Your tax advisorOhio Revised Code §5747.20
Checked September 30, 2026

How Ohio's income tax treats the exchange

Ohio adjusted gross income begins with federal adjusted gross income (R.C. 5747.01(A)), so gain deferred under IRC §1031 is not in the Ohio starting figure either. For nonresidents, R.C. 5747.20(B)(2)(a) allocates capital gains from the sale or transfer of real property to Ohio when the property is physically in Ohio. Cash taken out of an exchange, or a later taxable sale, produces Ohio-sourced gain for a nonresident, reported with Ohio's nonresident credit.

We found no Ohio withholding or estimated-tax form at closing for nonresident sellers, and no annual reporting when the replacement property is outside Ohio. The first point is an absence finding; confirm it with your closing agent. Municipal income taxes were not researched for this page.

The conveyance fee, on every deed

Ohio's conveyance fee has two layers. The county auditor collects a mandatory fee of $1 per $1,000 of value (R.C. 319.54), and counties may add a real property transfer tax of up to 30 cents per $100, levied on the seller (R.C. 322.02). The exemptions in R.C. 319.202 do not mention exchanges. Your closing agent files the statement of value with the auditor before the deed is transferred.

The handoff, in order

  1. Exchange agreement signed; your rights in the sale contract assigned to the intermediary; written notice to the buyer. All before closing.
  2. Closing instructions to your closing agent: net proceeds to the intermediary; nothing paid or credited to you.
  3. Conveyance fee and statement of value at the county auditor, as in any sale.
  4. Day 45: replacement property identified in writing, usually to the intermediary. See the identification rules.
  5. Replacement purchase closed by day 180, or by your tax-return due date if earlier and not extended. The deadline calculator shows both.

Questions Ohio sellers ask

Does Ohio withhold tax at closing if I live out of state?

We found no Ohio closing-time withholding for nonresident sellers. Gain you recognize on Ohio real property is still allocated to Ohio.

Is an exchange exempt from the Ohio conveyance fee?

No exemption for exchanges appears in R.C. 319.202. Each deed carries the fee.

If I exchange into property outside Ohio, does Ohio tax the deferred gain later?

Ohio follows the federal deferral. How Ohio sources the gain when you eventually sell the replacement property depends on your residency then; ask your tax advisor.

Related

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