1031 Exchange for a Marina

Slips, upland and fuel tanks are real property; the fuel, the boats and the service shop are not

Reg. 1.1031(a)-3(a)(2)(ii)(C) lists “stationary wharves and docks,” paved parking areas and “oil and gas storage tanks” among inherently permanent structures, and the ship's store, service building and dry-stack barn are buildings. Floating docks are not on the list, so they are judged under the regulation's permanence factors and, failing that, under the law of the state where the marina sits; the answer changes the amount you can exchange.

The revenue lines tell you which side each asset falls on. Sun Communities describes its marinas as offering “wet slip and dry storage space leases, end-to-end service (such as routine maintenance, repair, and winterization), fuel sales, and other high-end amenities”: slip and storage rent is payment for the use of space and belongs to the real estate, while service, fuel and the store are a business.

Travel lifts, forklifts, workboats, the rental fleet and fuel inventory are personal property, outside the exchange since 2018 and subject to section 1245 ordinary recapture up to the depreciation you took.

A state or Corps submerged-land lease is real property, but its remaining term decides what it is like-kind to

In Example 11 of Reg. 1.1031(a)-3, a government permit to place a cell tower on federal land, cancellable for a higher public purpose, was still an interest in real property because it was “in the nature of a leasehold.” A sovereignty submerged-land lease or dock permit that gives you the exclusive right to occupy the bottom and the water above it passes the same test.

Marinas on federal reservoirs usually hold only a lease: 16 U.S.C. 460d authorizes the Secretary of the Army to lease project lands “for such periods, and upon such terms and for such purposes as he may deem reasonable in the public interest,” with the water areas kept open to the public. Check whether your lease requires the agency's consent to assign and put that approval on the closing timeline.

Reg. 1.1031(a)-1(c) treats a leasehold with 30 years or more to run as like-kind to a fee. A marina lease with fewer years is still real property, but exchanging it for fee-simple replacement rests on thinner ground, so when the upland is fee-owned, let the fee carry the exchange and treat the short water lease as an accessory to it.

Form 8594 decides how much of a going-concern marina sale reaches the qualified intermediary

A marina sold with its business is an applicable asset acquisition under section 1060, so buyer and seller each file Form 8594 and allocate the price by the residual method across seven classes: fuel and parts inventory in Class IV, equipment, docks, buildings and land in Class V, service contracts and customer lists in Class VI, and goodwill in Class VII.

Hypothetical: a marina sells for $6,000,000. The parties allocate $4,600,000 to upland, buildings, docks and the assigned water lease, $500,000 to the travel lift, forklifts and workboats, $150,000 to fuel and parts, $250,000 to service contracts and $500,000 to goodwill. The intermediary receives $4,600,000 less closing costs; the equipment gain is ordinary income under section 1245, the inventory profit is ordinary, and the intangibles produce gain taxed this year.

Because equipment and real estate share Class V, write the real-estate figure and the lease assignment into the purchase agreement as separate line items; the form alone will not defend the exchange amount.

Fuel tanks, storm exposure and the Phase I set the closing date that starts your 45 days

Federal rules in 40 CFR Part 280 cover any tank system with at least 10 percent of its combined tank-and-piping volume underground, so a buried fuel-dock tank is regulated while an above-ground tank generally is not. Permanent closure follows 40 CFR 280.70 and site-assessment records must be kept three years; EPA reported 577,365 confirmed releases nationwide as of September 2024, which is the number behind every lender's tank questions.

A Phase I under ASTM E1527-21 satisfies EPA's All Appropriate Inquiries rule; its interviews, records search and site visit must be within 180 days of the purchase and the full report within one year, and the buyer needs it for CERCLA landowner defenses. Order it before listing, because a recommended Phase II moves closing, and closing is day zero for the identification period described on the critical 1031 deadlines.

Hurricane and flood exposure is the reason many marina sellers change geography rather than sector. If you are leaving a coastal market, the replacement can be inland or spread across states; the trade-offs are covered under environmental, insurance and climate risk in DSTs.

Replacement paths: another marina, storage or an MHC, a marina DST, or an OZ fund for what falls outside

Marina DSTs now exist. NexPoint Marina DST reported a first sale on March 11, 2026, a $42,710,095 offering and a $100,000 minimum on its Form D, and NexPoint Marina II DST filed its Form D on September 15, 2026 for what the sponsor describes as two stabilized full-service marinas in Tennessee and Kentucky. A trust interest keeps you in the sector with no travel lift to fix; how to vet the sponsor is on evaluating DST sponsors.

Owners who want out of waterfront risk altogether typically look at self-storage, a manufactured-housing community or senior housing, all of which sponsors offer in DST form, or at a single net-lease building.

An opportunity zone fund is not a substitute for the exchange but a place for gain the exchange cannot shelter, such as gain on self-created goodwill: the 1031 defers the real-estate gain only if you reinvest the full real-estate price, while the OZ election takes just the gain. The comparison is on 1031 vs opportunity zone funds vs paying the tax and the opportunity zone page.

Breakwater Exchange has placed more than a billion dollars into DST transactions as a 1031 exchange broker and works with vetted national sponsors, including those offering marina trusts; contact us through the form. Have your CPA and attorney confirm the lease and allocation treatment before you sign a letter of intent.