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1031 exchange question
Posted on 8/28/21 at 6:21 am
Posted on 8/28/21 at 6:21 am
Can I use it on investment property? I have a rental I’m thinking of selling and then investing profits into another, bigger investment property. And if it can be used on investment properties does it have to be the same type of property. Meaning if I own a fourplex now, do I have to use the proceeds on another four plex to avoid taxes or can it be any type of investment? TIA
2
Posted on 8/28/21 at 7:20 am to GravelLotinCanada
The property has to be held for investment for a 1031. The type of property does not matter as long as it is held for investment. You can sell the fourplex and buy a single family house, commercial, duplex, etc. You need to hire a 1031 Exchange Company who acts as a qualified intermediary before you sell. They hold your proceeds. After the sale, You have 45 days to identify the replacement property and 180 days to close on the replacement property. For a full tax deferral you have to replace the full amount that you sold for not just the amount of the net proceeds. For example, if you sold for $1M you have to buy replacement property (general rule is up to 3 properties) with a total value of $1M.
Posted on 8/28/21 at 8:20 am to GravelLotinCanada
Are you in the Baton Rouge area? Title Exchange is the best game in town for doing it.
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