Basic question regarding 1031 in NJ.

[Alex Penalva]

Hi guys, So I am new at investing, but I’ve been reading and listening to podcasts on the topics of rentals, and flipping. This question is in regards to the 1031 exchange, can I use the 1031 to sell property in one state and buy in another? And second question: if I buy a property worth 100k with 20% down, assuming I have 20k in the property, how soon can I do the 1031E?

[Patrick Hermans]

1031 exchanges are a way to differ the taxes on your capital gains, so theoretically you can do a 1031 as soon as you have gained any equity in the  property. However, you'll only be pushing off the taxes on the appreciation, so even if you were actually saving the money, it would take a long time and a large amount of appreciation to outweigh the costs associated with selling and buying.