Going from single family to multi

[Daniel Remin]

Can you do a 1031 Exchange if the property you buy is a multi family and you live in one unit while renting out the others?

[Dave Foster]

@Daniel Remin, The use of the property is the key.   The portion you use for your primary residence would fall into sec 121 and you would be eligible to take the first $250K ($500K if married)  of profit from that portion tax free if you've lived in the property for 2 out of the 5 years prior to sale.  The remainder you can do a 1031 exchange on and defer that tax indefinitely.

the key is in having good allocations for those respective amounts.  And while you can take the 121 money without any reinvestment, you can actually use the 1031 portion to buy another multi family you can use the same way.

Tax free and tax deferred - the holy grail!