Does anybody know about them? I have a specific question. Thanks

 

Post the specific question.

 

 

Ok. This has to do with a sale of a real estate. If I sell a property in one state and buy a property in another state, can I use 1031 shelter so as not to pay capital gains?
The sold property is being used as a secondary home while the proceeds from the sale will be used to purchase a primary residence.

Thanks guys

 

some information here as well

www.landam.com/1031

 

Should be fine. Just make sure to identify properly and have your ducks in a row.

 

Also, look here for some great info. This company specializes as a qualified intermediary.

http://www.apiexchange.com/

 

Are you sure? I thought it was supposed to be from second home to second home, investment property to investment property.

 

i know you need to do the transactions in a fairly short period of time so you dont get taxed

 

yes, within 6 months.

 

You ain't moving to Jersey are you cause we all haven't gotten our shots yet.

Hide the women and children. I know a nice townhouse development right near your office.

 

Neh, I am still in Philly. Just trying to figure out the best way to 'fly'

 

Find a Realtor who has specific knowledge in this. My former boss was a broker who knew all about 1031, unfortunately, I never learned. It can be pretty complicated...

 

Real Estate = Real Estate (when considering like-kind investments)

You can go from a duplex to a vacant lot or from a vacation home to a trailer park. As long as it is still real estate, it doesn't matter what you're doing with it. There's nothing that prevents you from moving into your investment property after you buy it.

For a definitive answer, and to CYA, you should talk to an accountant who is familiar with exchanges (they're the only ones who can legally give you advice on this, since it is a tax matter).

 

Got it, thanks clorich. I will see an accountant today, maybe she will know about it.

 

you cannot purchase a primary residence with the proceeds of your downleg of your 1031 exchange. if you do, you will blow your exchange and will have a capital gain. to be safe, If you want the property to be your primary residence, lease out the property for at least one year, then move into it.

remember 45 days to identify and 180 days to close.

 

I spoke with an accoutant yesterday who said that as long as it's real estate to real estate it should not matter. She said you have 3 months to find the property, 6 months to close on it. Also, she said I would need an attorney to set it up. Any thoughts on that?

 

you would need to set up your exchange with a third party accomadator. there are companies that specialize being an accomdator for exchanges. usually your escrow officer or good real estate agent can recommend an accomdator for you. make sure you go with a well respected company, because if they (accomadator) go out of business there goes your money. remember to put langague in your contract that you are going to do an exchange

I would double check your accountant's info. I don't believe you can close 1031 exchange on a primary residence. my understanding is it's likekind real estate to real estate for investment purposes only. one thing that i'm 100% sure of, is 45 days to identify and 180 days to close, not the 3 months that your account said. keep in mind that the IRS is very strick about procedures, so only have very experience consultant handle your exchange. afterall, if you mess up your transaction, the only thing at risk is paying capital gains tax.

 

My apologies...my reading comprehension = teh suck

You cannot go directly from investment property into a primary residence. You can buy it, but have to wait a while to move in. General consensus is 1 year, but I ran across a guy who did it after six months and decided to take his chances with the IRS (the IRS rules are somewhat vague on the time requirements, go figure).

How was the original property used as a second home? Was it occupied more than four months per year? A accountant might be able to work something out for you...

 

I have only owned the home for 4 months never lived in. Classified as a second home/investment.

How much would the taxes be if I owned the property less than a year?

 

You'll be paying 15% of:
New selling price - your purchase price - any real estate commission - title insurance - and state or local sales taxes - any other costs of selling.

Unless the value has gone up tremendously, you won't be paying much in CG taxes.

 

Well, based on the formula you just gave, I am like at 5k in CG. That's a pretty good chunk but not the end of the world. I was also told that if I am selling a property outside of my state, it would only be 7%. Any thoughts on that one?

Also, at which would I pay these taxes, not immediatelly right? I presume I would pay them when I file my taxes for that year.

 

my understanding is its 15% because its a Federal Tax and it doesn't matter if your selling property in different states. also, if you do the 1031 then your taxes are defered, however if you decied not to do the 1031 then you'll pay the taxes when you file your taxes.

Do yourself a favor and consult a CPA who understands 1031.