Posted by D MAYFIELD on June 04, 1999 at 17:06:45:
I’VE DECIDED NOT TO GO WITH THIS DEAL. I AM VERY NEW AT THIS AND I THINK IT WOULD BE TO COMPLICATED AT THIS TIME. THANKS FOR THE ADVICE.
Posted by D MAYFIELD on June 04, 1999 at 17:06:45:
I’VE DECIDED NOT TO GO WITH THIS DEAL. I AM VERY NEW AT THIS AND I THINK IT WOULD BE TO COMPLICATED AT THIS TIME. THANKS FOR THE ADVICE.
What contracts would I need to do an even trade on two properties? - Posted by D Mayfield
Posted by D Mayfield on June 03, 1999 at 21:47:12:
I have an opportunity to buy one house for $120,000 and trade it for a larger home worth $160,000, getting a $40,000 profit. I have never had this before,but I don’t want to look like I don’t know what I am doing. Please help.
Re: What contracts would I need to do an even trade on two properties? - Posted by Bill in OR
Posted by Bill in OR on June 05, 1999 at 07:02:47:
the mechanics of doing such a trade is straight forward. You’re trading your equity for equity in the 2nd property, with the balance (if any) paid as you agree. Contact a local commercial agent and ask where you might obtain an exchange agreement to study. Most agents do very little, if any, exchanges so it may take a little hunting to find one who knows what you’re talking about.
Taxes: Well, generally, to qualify for a tax deferred exchange, you must hold a property for trade or business, or Investment… not for sale, as inventory.
If yiou hope to qualify the transaction as a tax deferred exchange, the problem, upon audit, would be to explain how the first property was held as an investment property as opposed to a dealer property. Dealer property does not qualify for tax deferred status. You would then end up paying taxes on the gain, due for year in which the transaction occured.
Trades… - Posted by JPiper
Posted by JPiper on June 04, 1999 at 13:14:36:
Thought I would alert you to something first. A trade of this type could be structured as an exchange…a transaction which depending on the details for both you and the other party could carry significant tax advantages.
What I would do is talk to my CPA and attorney regarding this transaction. If there are advantages to one party or the other it will need to be handled in a specific fashion. I’ve only been involved in delayed exchanges, not an exchange of this type so I don’t know the in’s and out’s.
This deal to me would be one I would want some expert advice on. It’s not a “do it yourselfer” until you find out more facts regarding this. Speak to some experts, tell them what you’re doing, ask how they would structure, ask about the benefits to you and/or the other party regarding exchanges.
JPiper
Maybe… - Posted by David Alexander
Posted by David Alexander on June 04, 1999 at 12:51:53:
Are there underlying loans on the properties? Anyway to switch ownership, you deed him your property and he deeds you his. Tax ramifications, I have no Idea.
David Alexander