Sen. Burgin files bill in North Carolina Senate to modify 1031 exchange taxation

A new bill filed by State Sen. Jim Burgin in the North Carolina Senate seeks to align state tax treatment of 1031 exchange gains with federal regulations, according to the North Carolina State Senate.

The bill, filed as SB 461 on March 24 during the 2025 regular session, was formally listed with the short title: ‘Modify Taxation of 1031 Exchanges.’

The following is our breakdown, based on the actual bill text, and may include interpretation to clarify its provisions.

In essence, the bill modifies the taxation of certain gains in a 1031 exchange by allowing taxpayers to deduct from their North Carolina taxable income any amount included in their federal taxable income as non-like-kind property received in such an exchange, provided it does not exceed the taxpayer’s basis in the sold property. These changes apply to both corporate and individual taxpayers and are intended to align state tax policies with the federal code section 1031 exchanges. The act becomes effective for taxable years beginning on or after Jan. 1, 2025.

Burgin proposed another 42 bills during the 2025 regular session.

Bills in North Carolina follow a multi-step process before becoming law. A lawmaker starts by filing a bill, which is assigned to a committee for review. The bill must be read three times in each chamber. If one chamber changes the bill after the other passes it, both must agree on the final version. Once both chambers approve the same bill, it goes to the governor, who has 10 days (or 30 if the legislature is not in session) to sign, veto, or let it become law without a signature.

You can read more about the bills and other measures here.

Burgin graduated from The University of Tennessee Knoxville with a BS.

Burgin, a Republican, was elected to the North Carolina State Senate in 2019 to represent the state’s 12th Senate district, replacing previous state senator Ronald Rabin.