Many real estate investors in Pennsylvania have had an unpleasant surprise when they learn that the Commonwealth has never recognized the 1031 Tax deferred exchanges for Pennsylvania income tax purposes.  After years of discussing it, that has finally changed.  Just this month, Governor Wolf signed into law changes to the income tax statutes which will recognize the tax deferral nature of 1031 exchanges starting in 2023.  At this point, it appears that exchanges started in 2022 will still fall under the old regime.