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1031 We own a large two-family we rent out. We are thinking of selling and replacing it with a smaller two- or three-family. The home is a large Victorian and maintenance has become a problem. If we were to sell, how much time do we have to replace it with another rental, to postpone taxes? I know you addressed this in your column at one time, but we cannot remember. We want to make sure we are within allowable parameters |
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You are thinking of a Section 1031 tax-deferred exchange, which allows you to sell income-producing property and replace it with similar property, postponing capital gains taxes. You must identify the replacement property within 45 days of the sale of the first one, and complete the transactions within 180 days. A qualified third party must usually hold any money involved. The paperwork should be done under the guidance of a professional who is experienced in the procedure |
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Edith
Originally published on December 12, 2005 |
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