1031 Exchange - How to set it up?

[Sunny Malik]

Hi everyone, 

I have two properties that are under contract and will be closing in the next 20 - 30 days. 

We thought we may keep one as a rental but received great offers on both that we wanted to move forward with. 

We fully anticipate using the funds for further real-estate activity (flipping or long term hold). 

What's the best way to set up a 1030 Exchange? Anyone used someone in the past they would recommend? 

[Bill B.]

It’s been asked and answered (mostly by people like @Dave Foster) but it all comes down to intent. If you can look the IRS in the face and say you planned to rent it out and show the advertising for rent, the market analysis, etc etc you’re in good shape. If you listed it for sale before it was built or even as soon as it was built, that’s not so good. If someone came to you without you listing it for sale that’s slightly better. 

The “safe harbor” is 2 tax years or 2 calendar years, or two tax returns (as little as 1 year and 1 day.) depending on who you ask.

And if this happens once in your lifetime you pry get the benefit of the doubt. It if it happens 3 times in 2 years, probably not so much. 

Get a pro involved and hopefully they would turn you away if they didn’t think it would qualify.