JPiper and Ed Garcia - Posted by SW

Posted by Carey_PA on April 10, 2002 at 13:53:43:

I think the time from buying the new one from the sale of the old one is somewhere around 30-45 DAYS! But I’m no expert :slight_smile:


JPiper and Ed Garcia - Posted by SW

Posted by SW on April 10, 2002 at 08:43:52:

To piggy-back on Anthony’s question below. JPiper stresses the importance of reducing one’s tax liability through a 1031 exchange. Main advantage of a L/o being that you’d be able to hold a property long enough to claim that it’s an investment property.

Question 1: How long must you own a property in order to sell as a 1031 exchange?

Question 2: How do the tax implications change if you purchased the property through a self-directed IRA?

Question 3: The entire debate centered around selling on a L/O vs. for cash. What about buying? What is the best way to buy as a beginner?

If you lived in an expensive area where properties were appreciating 10+%/yr and you had motivated sellers calling you re: their property, had great credit and good income and but little cash or deal track record for a WLOC, how would you advise that person get started?



Re: JPiper and Ed Garcia - Posted by Frank

Posted by Frank on April 10, 2002 at 09:05:28:

In addition to those questions…

are you permitted to use a 1031 exchange if you are buying properties cash and flipping them for cash or loan proceeds?? This might be a stradegy to flip a few and then roll the profits into a long-term holder property.

Maybe - Posted by Tim_Cleveland

Posted by Tim_Cleveland on April 10, 2002 at 11:03:51:


No expert here on tax law, but my understanding is that you can get cash from the disposition *i.e. sale) of a property, put that money into an escrow account which cannot be touched for any reason, and use the funds to purchase a replacement property and have the proceeds sheltered from taxes on gain, depreciation recapture etc. There is a deadline between when you sell the original property and reinvest the funds in a new one before the potential tax benefits will be lost. I THINK this is 6 months. Also I don’t know if there is a period of time that you have to have owned the property in order to be eligible for a 1031.

Good question, maybe a way to have a lot of equity in your long term property and resultant good cash flow. Check the archives for past posts and I think there is a least one article on 1031’s.