Noob 1031 question for you

[Sean Ridlon]

Hello all,

I've only heard of 1031 exchanges casually. I have a SFR that is closing in the next 10 days and my brother asked me why I wasn't doing a 1031. I don't know why! Maybe I can't? The SFR was my primary residence for many years and has been for sale since 10/17. I have a significant percentage of equity.

Here's the question:

1) Can a primary residence be 1031'd into multifamily investment property/properties?

[Rhonda Wilson]

My first thought is that there is usually no benefit to do a 1031 on the sale of your primary residence. The purpose of a 1031 is to defer capital gains tax on the sale of an investment property. However, generally capital gains from your primary residence are exempt from capital gains tax up to a limit of $250k for a single or $500k for a married couple. 

Was the property a rental property in the recent past? If it was always and only your residence, then it doesn't qualify for a 1031 as far as I know.