1031 Exchange Questions and Concerns

[Pete T.]

I'm an owner of a 2 family, non-owner occupied residential property.
This property is co-owned with my mother. The deed is 75% my mother, 25% myself, with a Right of Sole Survivorship.

We are now planning to sell said property and have some concerns that we wish to be sure and understand.

My mother and I have agreed to split the proceeds from the sale 50/50 (not 75/25)

To make things easy, let's assume that the amount of capital gains is $1,000,000

1) Can I take my $500,000 and purchase another income producing building, and provided all other criteria of 1031 are met, will the 75/25 deed be an issue or is it irrelevant as long as my mother pays the capital gains on her $500,000 (should she not elect to 1031 as well).

2) The property is located in NJ -- I am a resident of FL, I have been told that any 1031 deferred capital gains is not subject to NJ capital gains, is that correct.

3) My mother, obviously, is not getting any younger, and no longer wants to be a landlord (understandable). However, the thought of her having to give 30% of the proceeds from the sale in capital gains taxes is pretty tough to swallow. What, if any, suggestions to do have. A private REIT is not something either of us are comfortable with (we prefer to retain control, etc. - and are not comfortable handing money over like that). My initial thought is to purchase a property, place it in a Revocable Trust with my two (now minor) children as the beneficiaries of said trust. In other words, my mother would buy property in FL, which I would manage, and all proceeds, earnings from the property could go to her and/or my children in a separate trust.

I have a meeting scheduled with a 1031 professional... however, I'd like to have some initial information prior to our meeting.

Thank You for any thoughts or ideas you wish to share.