Selling my 2nd Home in NYC, anyway to avoid Cap Gain Tax w 1031?

[Raul R.]

Hello all, I have a 2nd home that I'm in the process of selling in NYC, RIverdale.. Its a Studio Co-op, bought it in 2002 for 62k and should be able to get 130K. Spending 10K in renovations, currently in the middle of Renovations and I have no mortgage.

I made the mistake of not planning ahead and not claiming this Property as my Primary Residence to avoid any Capital Gain Tax, my primary residence is 5 minutes away I should have done it.. I looked into 1031 exchange and I don't believe my property qualifies because it's not Investment Property and the fact that is a Co-op wouldn't make it easy..

IF I have to Pay Capital Gain taxes so be it, but do I have any other Options to avoid paying Capital Gain? Anyone has any suggestions?

I'm an out of State Investor, been investing in NC for the past 2 years. Would love to use the entire Proceeds to purchase something in NC or any other Landlord Friendly state.

Are there any other 1031 variations out there that I can qualify for??

Also if anybody knows of any CPA in NYC with a good Real Estate background and specializes with Out of State investments feel free to recommend?

Thanks,

Raul R

[Bill Exeter]

Hi @Raul R.,

You are correct that your property does not qualify for 1031 Exchange treatment if it has never been rented out, and/or has not been held for investment, and/or has been used or is being used for personal use. You might be able to claim that the property was acquired solely for investment purposes and then it could qualify for 1031 Exchange treatment. Properties do not have to generate cash flow in order to qualify for 1031 Exchange treatment, but they would have to be held for investment purposes and not for personal use. Intent can always change, especially if you have time to do so and properly document the change of use.