Question joe b : 1031 ex that I buy for 750k and sell for 375 and invest in other than real estate? the difference?
I would like to sell for 750k and 375k to buy, a 1031 exchange I invest in real estate other than Best Answer:
Reply from
acermill
No, you can not. Below is the IRS definition of “the nature, qualifies for the treatment of exchange differences.” It must be an exchange of goods, such as nature. Instar properties in nature are of the same nature or character, although they differ in grade or quality. The exchange of real estate for real estate and the exchange of personal property for similar personal property are the exchange of property as nature. For example, trade improved store to another multi-family house with a manicured property with a building, or van for a pickup, is an exchange, such as Article, “You have to real estate stick, even if almost everyone can What kind of flat.
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The key here is that if you want to sell property for $ 750k and buy replacement property valued at only $ 375k, a tax-deferred exchange most likely wouldn’t save you any money. For full tax deferral, the value of replacement property must be equal to or greater than the value of propety given up. A partial exchange is possible, where some gain is deferred and some is taxable; however, the first dollar of tax savings doesn’t begin until the value of replacement property is greater than the adjusted cost basis of the property given up. If that adjusted cost basis of the property selling for $ 750k is noticeably less than $ 375k, a partial exchange may still be beneficial. The proceeds exceeding the amount necessary to purchase the $ 375k replacement property cannot be used to purchase anything other than real estate and still have a successful exchange. It could be a single family rental, commercial building, rental condo, ranch, vacant land, Christmas tree farm, parking lot — the lilke-kind requirement is fairly broad, but it cannot be stocks, mutual funds, or any other non-real property investment.