For Oregon Accredited Investors Selling Investment Property in 2026
Defer Every Dollar of Capital Gains Tax Without Triggering Oregon's 8% Withholding on Your Own Exchange
Oregon imposes the highest nonresident withholding rate of any state in the country. One missing form at closing locks up 8% of your gross sale price while you attempt to recover it. Breakwater guides accredited investors through every stage of their 1031, from sale strategy through closing day, with full knowledge of what Oregon's Department of Revenue requires. Even if you have done exchanges before and never heard of Form OR-18-WC.
As Featured In
The Oregon Problem
Oregon Layers Three Requirements on Top of the Federal Rules. Most Investors Only Know One of Them.
The federal 1031 rules are the same in every state. What makes Oregon dangerous is what the state adds on top.
The 8% Nonresident Withholding
On a $1.5M sale, that is $120,000 held by the state if the waiver is not filed.
Oregon requires 8% withholding on real estate sales by nonresidents unless you obtain a withholding waiver by filing Form OR-18-WC before closing. Failure to file means 8% of your sale price gets withheld automatically, which becomes a nightmare to recover later. The exemption is available, but only if the form is filed correctly and on time.
The Oregon Clawback Provision
Oregon will still collect its share of the original gain, regardless of where you live.
Oregon has a special clawback provision under ORS 316.738. If the replacement property acquired in the exchange is located outside Oregon, and a gain or loss is recognized for federal purposes when that replacement property is eventually sold, Oregon adds the difference back to federal taxable income. Exchange an Oregon property for a DST in another state, sell that DST years later, and Oregon will still collect.
The Annual Department of Revenue Report
A recurring compliance obligation that follows your exchange every year.
For taxpayers who sell Oregon real estate and replace it with an out-of-state property, Oregon requires filing an annual report with the Oregon Department of Revenue under ORS 316.738 and 317.327. Like California's FTB 3840, this is not a one-time filing. Most investors completing an out-of-state exchange never hear about it until the penalty notice arrives.
Breakwater plans around all three before your property closes.
The Solution
What a 1031 Advisor Who Understands Oregon Actually Does for You
Breakwater is not a DST sponsor. We are a dedicated 1031 exchange advisory firm. We work exclusively for the investor, not the sponsor, and our team has direct working knowledge of both the federal exchange rules and Oregon's specific compliance requirements.
Here is what that looks like in practice:
Pre-Sale Exchange Strategy
Map your requirements before the 45-day clock starts.
Get your debt and equity requirements mapped to a qualifying replacement property before your 45-day clock starts, even if you have not yet confirmed whether Oregon's withholding exemption applies to your specific transaction structure.
Form OR-18-WC Coordination
Keep all proceeds working instead of held by the state.
Keep all 8% of your gross sale proceeds working in your exchange instead of held by the state, even if your closing agent has never processed an Oregon 1031 withholding waiver before.
Clawback and Annual Filing Awareness
Oregon's ongoing compliance built into your plan from day one.
Have Oregon's ongoing compliance obligations built into your post-exchange plan from day one, even if your replacement property will be in a state with no income tax and you assumed Oregon's reach ended at the border.
Get Your Exchange Right in Three Steps
Start Your Free Oregon Exchange Analysis
Same-day inventory match with residency status confirmed.
Tell us where you are in your transaction. Sold, under contract, or still planning. We review your debt and equity position, confirm your residency status for Oregon withholding purposes, and match you to available inventory the same day.
We Build Your Replacement Shortlist
Pre-screened DSTs matched with OR-18-WC coordination built in.
Before your 45-day clock starts, we identify pre-screened DSTs that match your exact deferral requirements, file Form OR-18-WC coordination into the closing timeline, and brief you on the annual Department of Revenue reporting obligation so it does not arrive as a surprise in year two.
Close With Everything Handled
Every Oregon compliance obligation managed through and beyond closing.
From withholding waiver coordination at closing to annual ORS 316.738 reporting built into your post-exchange plan, we manage every Oregon compliance obligation through and beyond the finish line. You close clean with no hidden obligations waiting downstream.
No obligation. No cost to review your situation.
What You Get Access To
Institutional-Grade Replacement Properties Matched to Your Exchange
Each offering includes full due diligence documentation, debt and equity specifications, and projected cash flow. Everything you need to make a confident identification before your clock expires.
Passco Riverside DST
Sponsor: Passco Companies, LLC
ERP 1031 Industrial Portfolio IV DST
Sponsor: Energy Related Properties (ERP)
Why Not Go Direct?
Advisory-Led vs. Direct-to-Sponsor: What You Are Actually Choosing Between
Inventory
Direct-to-Sponsor
Limited to what that sponsor sells.
Advisory-Led (Breakwater)
Full marketplace across all sectors.
OR-18-WC Filing
Direct-to-Sponsor
Your responsibility.
Advisory-Led (Breakwater)
Coordinated before closing.
Clawback Planning
Direct-to-Sponsor
Rarely mentioned.
Advisory-Led (Breakwater)
Built into replacement property selection.
Annual DOR Reporting
Direct-to-Sponsor
Your responsibility.
Advisory-Led (Breakwater)
Built into post-exchange compliance plan.
Debt/Equity Matching
Direct-to-Sponsor
Your responsibility.
Advisory-Led (Breakwater)
Handled and verified before identification.
Deadline Management
Direct-to-Sponsor
Your responsibility.
Advisory-Led (Breakwater)
Fully coordinated 45/180-day tracking.
Sponsor Alignment
Direct-to-Sponsor
Works for the sponsor.
Advisory-Led (Breakwater)
Works for you.
| Feature | Direct-to-Sponsor | Advisory-Led (Breakwater) |
|---|---|---|
| Inventory | Limited to what that sponsor sells. | Full marketplace across all sectors. |
| OR-18-WC Filing | Your responsibility. | Coordinated before closing. |
| Clawback Planning | Rarely mentioned. | Built into replacement property selection. |
| Annual DOR Reporting | Your responsibility. | Built into post-exchange compliance plan. |
| Debt/Equity Matching | Your responsibility. | Handled and verified before identification. |
| Deadline Management | Your responsibility. | Fully coordinated 45/180-day tracking. |
| Sponsor Alignment | Works for the sponsor. | Works for you. |
Going direct costs less upfront. A missed OR-18-WC on a $2M sale costs $160,000 in withheld proceeds while you file for a refund.
The Rules
Before You Sell, Know All of These
A 1031 Exchange can protect hundreds of thousands in equity. In Oregon, there are state-specific requirements on top of the federal rules that most investors never see coming.
Qualified Intermediary Required
You cannot receive or control the sale proceeds at any point. A QI must be engaged before your relinquished property closes. Do it after and your exchange is disqualified before it begins.
The 45-Day Identification Window
From the day of sale, you have exactly 45 calendar days to identify replacement properties in writing. The IRS offers no extensions and no exceptions, regardless of circumstance.
The 180-Day Closing Rule
Your replacement property must close within 180 days of your sale date. Miss this deadline and the full capital gain becomes taxable immediately.
Oregon's 8% Nonresident Withholding
If you are a nonresident selling Oregon property, 8% of the gross sale price is withheld at closing unless Form OR-18-WC is filed and approved in advance. For a $2M sale, that is $160,000 held by the state. The 1031 exemption applies, but only with correct and timely filing. This form must be submitted before the closing date, not at it.
The Oregon Clawback
Under ORS 316.738, if you exchange Oregon property for a replacement property located outside Oregon, Oregon retains taxing rights on the original deferred gain. When that replacement property is eventually sold in a taxable transaction, Oregon will add the deferred gain back to your taxable income and collect the state tax owed, regardless of where you live at the time of sale.
Annual Oregon Department of Revenue Reporting
Any investor who exchanges Oregon property into an out-of-state replacement is required to file an annual report with the Oregon Department of Revenue every year until the deferred gain is recognized. This obligation begins the year of the exchange and continues until the gain is finally taxed. Failure to file triggers penalty assessments.
Most Oregon investors know rules 1 through 3. Rules 4 through 6 are where exchanges quietly fail, and where Breakwater planning pays for itself.
Credibility
16+ Years. $1.1B+ In Exchanges Guided. Zero Sponsor Allegiances.
Breakwater Capital is a dedicated 1031 exchange advisory firm. We bridge the gap between selling an Oregon investment property and securing a tax-deferred legacy, for accredited investors who cannot afford to get the state-specific details wrong.
Josh Chapin
President · 200+ Seminars on 1031 Exchanges
Josh has an extensive background in financial planning, specializing in unique investments and tax planning concepts. Since founding Breakwater Capital, he has developed deep expertise working with high-net-worth individuals and business owners — delivering thoughtful, personalized advice with a common-sense approach to complex strategies.
Series 7, Series 6, Series 63, Series 65, SIE, Life & Health
Supported by a Dedicated Exchange Team
Debbie Bannister
Certified Exchange Specialist · 18+ Years
Monique Wilson Kaiser
Senior Exchange Administrator · Since 1996
Naomi Booker-Abawag
Operations Manager
Taylor Pennington
Exchange Administrator · Since 2003
Experienced Advisory
Decades of collective experience in commercial real estate and tax-advantaged structures, including the specific withholding, clawback, and annual reporting requirements Oregon places on out-of-state exchanges.
Customized Portfolios
We specialize in scaling exchanges, splitting one large sale into multiple DST assets across sectors and geographies to meet your exact deferral requirements.
Client-First Philosophy
We work for you, not the sponsor. Our recommendations are built around your exchange, not around what is easiest to move.
As Featured In
Featured Offering
MCG Arden NC Multifamily DST
Sponsor: Madison Capital Group
A Class A garden-style community in a high-growth North Carolina submarket, with strong employment fundamentals and favorable supply dynamics.
Every week you wait to build a replacement shortlist is a week your 45-day window narrows. Oregon investors who have not started their OR-18-WC coordination before listing their property are already behind. On a $2M Oregon sale, 8% withholding is $160,000 locked up while you file for a refund. That is not a compliance footnote. That is a cash flow emergency that can derail an exchange in progress.
Two Ways to Get Started
Still planning your sale?
Request the Breakwater DST Overview. We'll walk you through current inventory, show you how debt and equity matching works, flag your Oregon-specific filing requirements, and help you build a replacement shortlist before your property ever hits the market.
Already sold or closing soon?
Your 45-day clock may already be running. Call us directly and we'll prioritize your file today.
Schedule a ConsultationNo obligation. No cost to review your exchange situation. If Breakwater is not the right fit for your transaction, we will tell you clearly and point you toward who is. Oregon's compliance requirements are genuinely complex. The only thing more expensive than getting expert help is not getting it and finding out on closing day what you missed.
© Copyright 2025. All rights reserved.
IMPORTANT: Our Intent Is Not To Sell Nor Does Our Website Or Content Be Considered An "Offer To Sell" Securities. The Content On Our Website Is Education Purpose Only. Please Consult With An Attorney Or Your Local CPA To Determine If The Securities And Strategies Are Best For You And Determine The Tax Or Legal Consequences Of Any Particular Investment Or Strategy. Any Investment Or Strategy Involves Risk.
Legal Disclaimer
Privacy PolicyThe contents of this communication: (i) do not constitute an offer of securities or a solicitation of an offer to buy securities, (ii) offers can be made only by the confidential Private Placement Memorandum (the "PPM") which is available upon request, (iii) do not and cannot replace the PPM and is qualified in its entirety by the PPM, and (iv) may not be relied upon in making an investment decision related to any investment offering by an issuer, or any affiliate, or partner thereof ("Issuer"). All potential investors must read the PPM and no person may invest without acknowledging receipt and complete review of the PPM. With respect to any "targeted" goals and performance levels outlined herein, these do not constitute a promise of performance, nor is there any assurance that the investment objectives of any program will be attained. All investments carry the risk of loss of some or all of the principal invested. These "targeted" factors are based upon reasonable assumptions more fully outlined in the Offering Documents/ PPM for the respective offering. Consult the PPM for investment conditions, risk factors, minimum requirements, fees and expenses and other pertinent information with respect to any investment. These investment opportunities have not been registered under the Securities Act of 1933 and are being offered pursuant to an exemption therefrom and from applicable state securities laws. All offerings are intended only for accredited investors unless otherwise specified. Past performance are no guarantee of future results. All information is subject to change. You should always consult a tax professional prior to investing. Investment offerings and investment decisions may only be made on the basis of a confidential private placement memorandum issued by Issuer, or one of its partner/issuers. Issuer does not warrant the accuracy or completeness of the information contained herein. Thank you for your cooperation.
Securities offered through Emerson Equity LLC Member: FINRA/SIPC. Only available in states where Emerson Equity LLC is registered. Emerson Equity LLC is not affiliated with any other entities identified in this communication.
1031 Risk Disclosure:
There is no guarantee that any strategy will be successful or achieve investment objectives; Potential for property value loss – All real estate investments have the potential to lose value during the life of the investments; Change of tax status – The income stream and depreciation schedule for any investment property may affect the property owner's income bracket and/or tax status. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities; Potential for foreclosure – All financed real estate investments have potential for foreclosure; Illiquidity – Because 1031 exchanges are commonly offered through private placement offerings and are illiquid securities. The secondary market for these investments is very limited, and early sale is not guaranteed. Reduction or Elimination of Monthly Cash Flow Distributions – Like any investment in real estate, if a property unexpectedly loses tenants or sustains substantial damage, there is potential for suspension of cash flow distributions; Impact of fees/expenses – Costs associated with the transaction may impact investors' returns and may outweigh the tax benefits.
Real Estate Risk Disclosure:
There is no guarantee that any strategy will be successful or achieve investment objectives. Potential for property value loss – All real estate investments have the potential to lose value during the life of the investments. Change of tax status – The income stream and depreciation schedule for any investment property may affect the property owner's income bracket and/or tax status. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities. Potential for foreclosure – All financed real estate investments have potential for foreclosure. Illiquidity – These assets are commonly offered through private placement offerings and are illiquid securities. There is no secondary market for these investments. Reduction or Elimination of Monthly Cash Flow Distributions – Like any investment in real estate, if a property unexpectedly loses tenants or sustains substantial damage, there is potential for suspension of cash flow distributions. Impact of fees/expenses – Costs associated with the transaction may impact investor's returns and may outweigh the tax benefits. Stated tax benefits – Any stated tax benefits are not guaranteed and are subject to changes in the tax code. Speak to your tax professional prior to investing.
Opportunity Zone Disclosures:
Investing in opportunity zones is speculative. Opportunity zones are newly formed entities with no operating history. There is no assurance of investment return, property appreciation, or profits. The ability to resell the fund's underlying investment properties or businesses is not guaranteed. Investing in opportunity zone funds may involve a higher level of risk than investing in other established real estate offerings. Long-term investment. Opportunity zone funds have illiquid underlying investments that may not be easy to sell and the return of capital and realization of gains, if any, from an investment will generally occur only upon the partial or complete disposition or refinancing of such investments. Limited secondary market for redemption. Although secondary markets may provide a liquidity option in limited circumstances, the amount you will receive typically is discounted to current valuations. Difficult valuation assessment. The portfolio holdings in opportunity zone funds may be difficult to value because financial markets or exchanges do not usually quote or trade the holdings. As such, market prices for most of a fund's holdings will not be readily available. Capital call default consequences. Meeting capital calls to provide managers with the pledged capital is a contractual obligation of each investor. Failure to meet this requirement in a timely manner could elicit significant adverse consequences, including, without limitation, the forfeiture of your interest in the fund. Leverage. Opportunity zone funds may use leverage in connection with certain investments or participate in investments with highly leveraged capital structures. Leverage involves a high degree of financial risk and may increase the exposure of such investments to factors such as rising interest rates, downturns in the economy or deterioration in the condition of the assets underlying such investments. Unregistered investment. As with other unregistered investments, the regulatory protections of the Investment Company Act of 1940 are not available with unregistered securities. Regulation. It is possible, due to tax, regulatory, or investment decisions, that a fund, or its investors, are unable realize any tax benefits. You should evaluate the merits of the underlying investment and not solely invest in an opportunity zone fund for any potential tax advantage.