1031 rental to a 2 unit property and live in one?

[Maria D'Aura]

Can someone educate me on the guidelines and help me determine if this option is possible? I'm looking to understand what the determining factors are to decide if it fits a 1031.

I'm selling a rental condo to 1031 exchange. I've found a property with a main house and a rental cottage on the same property. I'd like to move into the main house as my primary residence and use the cottage as my rental. The cottage is currently rented. 

Is it possible to make this work?

[Dave Foster]

@Maria D'Aura It could work perfectly fine depending. On valuations.  In a 1031 you must purchase at least as much replacement investment real estate as you sold if you want to guilt defer taxes.  So if the value of the investment portion of the new property is worth at least as much as your sale and you report it that way you will be fine.