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Updated 11 months ago,
Can I use a 1031 exchange to buy siblings part of inherited home
Hello everyone.
First time question but have been helped many times with the great advice found on this website.
My Mother's house is located in San Diego, CA. When she passes, the house will be left to 4 adult children, but with the passing of Prop 19 on April 1, 2021, 1 of the 4 children will have to claim it as their primary residence to keep my mother's tax basis. We have always figured that we would keep the house and eventually turn it into a rental, splitting it 4 ways, but now with Prop 19, my brother would be the one claiming it as his residence. (Still not exactly sure where that leaves the other sibling's inheritance, and honestly, I'm not too sure that there is a clear answer for that.) My question is, if I wanted to invest in the house when it becomes a rental, assuming that my brother would need to live in it for 2 years, could I then use a 1031 exchange to do so? I would be buying out 2 of my sibling's portions, leaving me with 3/4 ownership. I would be using the full amount of the exchange plus adding cash to cover the amount owed.
Thank you in advance for your vast helpful and vast knowledge.