1031 Exchange

Comments(10)

• 
  ahmedmu2nd December, 2004

  I think I cannot do a 1031 exchange if I sell my rental properties and buy a vacation home, but what if I use it as vacation rental?

• 
  NewKidinTown22nd December, 2004

  You don't need a real estate agent to complete a 1031 exchange. You do need a qualified intermediary, however. Perhaps you can contact Bill Exeter (wexeter), who contributes to this site. Bill is a professional exchange accommodator.
  
  The replacement property in a qualified exchange must be used for a qualified investment purpose. Rental use does qualify, but if the property is intended for personal use, you will run afoul
  
  Mr. Exeter can help you sort out all this questions.

• 
  ahmedmu2nd December, 2004

  Thanks a lot. I will ask him. I had the rental houses in my name; I didn't have a LLC at that time, I have one now.
  
  I asked an expert on the web the same question; his terse reponse was "NO". I guess he means I cannot exchange a (personal) vacation home for a rental property.

• 
  tzachari2nd December, 2004

  I am not an expert on 1031 exchages, but my understanding is 1031 exchanges can be used between any 2 'like' properties. ie..between a vacation home and a personal residence, a rental property and a car garage, personal residence and a piece of land.
  The 'like' property in the above exchanges are because they are all under the Real Estate umbrella of investments.
  However, you can't exchange between 2 'unlike' properties. An example would be between your rental property and a piece of machinery for your factory, residential land versus Cattle used for farming.

• 
  tzachari3rd December, 2004

  Thanks newkidintown for clarifying this.

• 
  wexeter5th December, 2004

  You can certainly exchange your two rental properties into another rental property without a realtor. The Qualified Intermediary would assign into the purchase and sale agreement or contract that the seller and buyer draft.
  
  The properties sold and the properties acquired must be acquired and HELD as rental/investment or used in your business. Vacation homes used as vacation homes (personal use only) would not qualify, but vacation rentals (properties acquired and rented to vacationers) would qualify. Slight personal use, such as two weeks per year , presumably would not disqualify the 1031 exchange as long as it is truly rental property.
  [addsig]

• 
  ahmedmu6th December, 2004

  That's exactly what I want to do. I want to use it for a week per year, no more than 2 weeks.

• 
  ahmedmu6th December, 2004

  Can I send you an email Bill?
  
  My email is: **Please See My Profile**

• 
  wexeter6th December, 2004

  I sent you a private message with my email address. You can also check my profile.
  [addsig]

• 
  ahmedmu7th December, 2004

  Thanks Bill