Posted by Scott-CA on December 19, 2002 at 21:12:57:
I’m not an accountant but I am in the middle of an exchange right now.
You can ask the title company handling the property you are selling for a recommendation. I used IPX. www.ipx1031.com
In order to avoid capitol gains taxes, the replacement properties must be of equal or greater value than the relinquished properties AND you must roll over ALL of your equity.
I would guess that if it showed up on at least two years of tax returns as investment property, than it should be considered a legitimate investment property. Merely placing an ad to rent seems a little weak as the only qualification.
Don?t know yet. When I do my taxes next year, I?ll find out.
For a 1031 capitol gain deferment, who qualifies as a “Qualified Intermediary” to hold sale proceeds in escrow until purchase of the new property? This is for the case where proceeds from sold property are put into new property (not exchanging).
As long as the entire gain is used in the purchase of the “new property”, does it matter if the purchased property value is less than the property being sold?
Once a property has been advertised (newspaper)as rental property, is it considered a rental unit for a 1031 exchange? Even if it has never housed tenants or held a lease?
What paper work needs to be filed for an exchange? Is 8824 the correct tax form for a 1031 exchange?
Posted by JHyre in Ohio on December 20, 2002 at 07:44:19:
Scott gave you good answers. The property needs to be an investment property, not necessarily a rental. Merely advertising it as a rental won’t make it one. The 8824 is the form you need.