Posted by chet on February 20, 2005 at 24:57:58:
I heard this discussed on a radio show and it’s pretty dang hairy. get a good cpa / atty to help you.
1031 LIke-Kind Exchange - Posted by Evan
Posted by Evan on February 18, 2005 at 19:54:10:
I’m selling a rental property I’ve held for 10 years.
I would like to do a 1031 with a property that I have
a 1/2 interest in. It’s a two family home. The top
portion is my primary residence, the bottom is a rental property. I would like to buy out my partner’s 1/2
interest. Will a 1031 work under these circumstance?
Re: 1031 LIke-Kind Exchange - Posted by John (OR)
Posted by John (OR) on February 25, 2005 at 05:32:37:
The simple version is you can not sell an investment property and then buy a personal residence. Hence you will not be able to buy out your partner for the parts that will not be used as an investment property.
The parts that will be used as an investment property might fit the program. Another possible problem if you already have an interest in the property. Hence the purchase for the 1031 involves related parties. This can stop the transaction from what I remember.
So, check with tax attorney about the law and if your proposed deal actually fits the 1031 code.
John B. Corey Jr.
Chelsea Private Equity LLC
Re: 1031 LIke-Kind Exchange - Posted by TomB
Posted by TomB on February 22, 2005 at 19:29:37:
My experience has been that you will not be able to exchange out of your portion of the property because it has been declared at your primary residence. It will be determined by how you and your partner have declared your owenship interest. If you buy out your partners onwership rights, you will have to wait an additional 2 years before being able to do an exchange. Talk to your title company and see if they have a recommendation of an accountant who knows exchanges well. I have done several exchanges in last 9 years, and each accountant will interperet the law differently. If your title company has a designated “QI - Qualified Intermediary” within their office, they will be able to give you some guidance in this area, even though they may not be an accountant or attorney.
Good Luck
Tom in SD