Converting current primary residence to investment with 1031

[Jared Kouba]

My wife and I are looking to move into a new home.  We are considering selling an investment property and converting our exisiting primary home into a rental.  We would need to use the proceeds from the rental sale to make a sizable down payment on our new home.  Is there a legal way for my LCC to purchase our current primary home utilizing 1031 exchange to avoid depreciation recapture and long term captial gains.  We still have a mortgage on our primary home, so I could see this getting messy, even if it is possible.  

[Bill B.]

Nope. Can’t buy anything you already own. Sell your existing primary tax free and use that money for new primary or sell rental and pay the taxes to use that money to buy new primary.