Separate 1031's
I am trying to relocate to another state. I have two different properties which have been held as rentals for over two years. Trying to coordinate exchanging both at the same time to purchase one larger property would be difficult.
Do the rules allow two separate exchanges within the same year?
Ask your accountant and not me, but this is what I believe.
1. go to the library - find the us govt section - find the books CFR - look for 1.1031 and read IRS 1031 - it is about 40 pages long.
I think you will find that there is no problem processing the two houses separately or toigether for that matter. The super important thing is that you notify the buyer and get him to agree, notify the escrow house or whoever is middle man - make suure the money does not go to you but to your stand in, pick new prop within 45 days of close ( 3 props or any nbr of value less than 200 pct old value), actually buy the new prop before 180 days, and before you file your taxes - delaying taxes as needed. This is what I believe you wiol find when you READ THE 1031.
You don't have to do exchanges EXACTLY at the same time. You have a window of 45 days to identify , and 180 days to complete transaction. Depending on the exchanger, you may be able to combine them (for a lesser fee - another positive), as long as they are both titled int he same name.
Ther are a bunch of exchange services out there. YOu can do a search on the web to find a slew of them.
One I recommend is:
http://www.ipx1031.com/index.html
Good Luck!
lilbitsasi,
I get the sense that you want to exchange two rental properties for one replacement property in the same exchange event.
The exchange rules do allow you to relinquish multiple properties in exchange for one replacement property.
The exchange timing for two properties you want to relinquish would work something as follows: Within 45 days after the sale of the first property, you must identify your replacement property in writing to your exchange agent.
Within 180 days after the sale of the first property, you must complete the acquisition of your replacement property AND the sale of the second relinquished property.
Within 45 days after the sale of the second property, and before the settlement on your replacement property identified after the first relinquished property sale, identify the (same) replacement property in writing to your exchange agent.
You are also free to use separate exchanges for each relinquished property and acquire two replacement properties. There is no limit on the number of qualified exchanges you might accomplish in a single tax year.
I appreciate the quick replies.
All of you have been very helpful.
Thanks!