1031 Into A Rental Addition On Primary Res?
I am contemplating selling an out of town rental property and want to know if I can use the profit to build an additon on my primary residence that will serve as a rental unit or home office. Can I 1031 exchange the funds from the rental property sale to pay for the addition?
I want to build a studio above my garage and rent it out. I should net $50k from the rental property sale and would like to defer taxes on it. Altenatively I might use the space as a home office. Advice anyone?
Does anyone know if 1031 can be useful
1031 would not work in either case.
You can do whatever you want with the proceeds from the sale. However you will pay taxes on either example you suggested. If you want to defer the taxes, you can use a 1031 exchange and buy another like kind property.