1031 Exchange questions

[Meghan Schubring]

First timer here! I just sold a rental home that I use to live on and I am going to be hit with capital gains... I closed the deal on the 14th of May. I have been asking my CPA about 1031 exchanges and she keeps sending me google links... Am I allowed to still invest in a house if I find before the 45 days is up from closing? Or do I need have already had the house lined up? Also whats the process for this? I know I really need to find a new CPA for this... But looking for some quick help! THANKS IN ADVANCE!

[Mindy Jensen]

Hi @Meghan Schubring . I hate to be the bearer of bad news, but if the property has already been sold and you have received the funds yourself, you are no longer eligible for a 1031 exchange.

How long ago did you live in the property? If you lived there in the last 5 years, you may be able to exclude some or all of your capital gains. If it was more than 5 years ago, you're looking at paying the full tax, although it's taxed at long term gains of either 0%, 15% or 20% (depending on your income) instead of short term which is taxed at your income rate. (I think, this stuff all just changed and I'm not a CPA)

There are several real estate-focused CPAs on this site if you're looking for a new one. Your CPA doesn't HAVE to be local.