Posted by John Merchant on February 06, 2005 at 11:17:34:
FYI, Bill Exeter is a known authority on 1031 procedures.
Welcome to creonline Bill, good to see a posting of yours here.
1301 tax exchange - Posted by rudy
Posted by rudy on January 29, 2005 at 19:52:59:
I have a rental property but I am trying to purchase a home and need the equity in the rental to do it. Does anyone know how I can sell the rental and avoid the capital gains tax and apply the cash to the purchase of the new home. ( I have never lived in the rental and the new home purchase is going in november of this year. so I am looking for a loophole)
Re: 1301 tax exchange - Posted by chet
Posted by chet on January 30, 2005 at 22:42:53:
you might chat w/ your CPA or tax atty to see if they have a shelter that you can use.
Cant’ Do It - Posted by Dazed and Confused
Posted by Dazed and Confused on January 30, 2005 at 14:57:26:
I’m assuming you want to live in the home yourself. If that’s the case you’ll end up taking the capital gains hit if you move into it yourself. You need to use the home as investment property for at least a year (or two). Then you can move into it yourself.
I looked into this myself.
If you need the equity from the rental to use on your home, consider taking a home equity loan out on the rental. You can use the funds to pay on your home, the interest is tax deductible, and your tenants will be paying the note for you.
Good luck.
Dazed
Re: 1301 tax exchange - Posted by rudy
Posted by rudy on January 29, 2005 at 19:58:01:
sorry I forgot this is in California
Re: Cant’ Do It - Posted by Rich[FL]
Posted by Rich[FL] on January 31, 2005 at 11:49:42:
Just a clarification…
Just heard on a local real estate radio show about a small change in the 1031 rules: apparently Pres. Bush signed a law last October which changed the law slightly. In the past, after doing a 1031 exchange and holding on to the property for “at least a year or two” as an investment, you could move into it for 2 years then sell using your capital gains tax exclusion. Now, the property must be held for a minimum of 5 years to avoid capital gains treatment. Two of those five, of course, you have to live in it as your primary residence to qualify for the exclusion.
Don’t have a citation for this at the moment. You can probably search the IRS web site for the details.
Rich
Re: Cant’ Do It - Posted by William L. Exeter
Posted by William L. Exeter on February 06, 2005 at 10:13:38:
I would be happy to email the bill to those who would like it.