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09. What if the sale of the Maine real property is considered a Section 1031 like kind exchange? Am I subject to the Maine Real Estate Withholding requirement?

Maine Revenue Services follows the federal guidelines on the treatment of IRC Section 1031 like kind exchanges. Therefore, if no gain is recognized for federal income tax purposes (due to the qualifying like kind exchange transaction), no gain is recognized for Maine income tax purposes. As such, the seller may request an exemption from the Maine Real Estate Withholding requirement for this property transfer. A copy of the Section 1031 like kind exchange contract must accompany the request for exemption form prior to the closing.

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