Are 1031 Exchanges Hard to Do?

Question: “I’d like to sell my rental house here and use the money to buy to exchange into a fourplex. But I’m a little concerned about 1031 exchanges. I don’t know much about them. Are they hard to do?” Answer: Good news: 1031 tax deferred exchanges are easy! And they’re quite inexpensive to do too…usually
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How Long After Selling Can You Buy Another Home & Avoid Taxes?

Question: “I’d like to avoid paying taxes on the profit from my home. How long do I have after I sell my home to buy another one?” Answer: Well my friend, you’re either 1) behind the times or 2) confusing the rules for your principal residence with those for investment property: Until 1997, you had
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Can You Fix and Flip with a 1031 Exchange?

Question: “Hi Gary. I have a question about real estate investing. Can you buy and flip fixer uppers doing a 1031 exchange?” Answer: No. If you buy a property and sell it a short time later without “holding it for investment” a sufficient time (probably 1-2 years), the IRS will likely consider it “dealer property”
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Can You Identify More than One Property to Buy in a 1031 Exchange?

Question: “We’ll be selling a rental house in Alabama and want to buy something here doing a 1031 exchange. I know we have to designate what property we’re going to buy within 45 days of closing the Alabama house. Can we identify more than one?” Answer: Yes. Here are the 3 options you have for
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Some Finer Points of 1031 Exchanges

Question: “I sold a rental house for $400,000 and am doing a 1031 tax deferred exchange. There was no loan, so I have $375,000 in my exchange account. I’m buying in Texas and my agent there says I must buy for $400,000. Is he correct? I thought only had to use my cash from the
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Can I Do a 1031 Exchange on My Vacation Condo?

Question: “Can I do a 1031 exchange on my vacation condo?” Answer: I talked with a 1031 expert said about doing an exchange with a vacation property. Here’s what she said: A second home that is not reported on Schedule E and the interest is written off against your personal income does not qualify for a
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Can You Do 1031 Exchanges with Property Outside the U.S.?

Question: “Can I do a 1031 exchange from my San Diego rental into a property in Italy, or can I only exchange for something in the U.S.?” Answer: You can only exchange your San Diego property for another investment property in the U.S., or possibly U.S. territories or U.S. possessions. Temporary Regulations issued in 2005
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Is It Too Late for a 1031 Exchange?

Question: “I’m selling a rental property and we’re closing in two weeks.  I just talked to my tax guy and he said I should do a 1031 tax-deferred exchange.  Is it too late?” Answer: Probably not. Fortunately you’re deciding sooner than my client did.  He called me as the grant deed (transferring ownership to the
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Limits on 1031 Exchange

Question: “We just bought a house to fix and flip and will do a 1031 exchange so we don’t have to pay taxes.  So our question is…” Answer: Sorry, but I’ve got to interrupt.  I’m about to make you very sad right now, but you’ll avoid much greater sadness later. Per IRS rules, you cannot
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Can You Move Into Your Rental to Avoid Taxes?

Question: “I talked with my tax guy about selling my rental condo and he said I’m going to have to pay about 40K in taxes if I sell it without doing a 1031 exchange.  So I’m going to move into my rental for two years so that I don’t have to pay any taxes when
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