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Updated about 2 months ago, 11/07/2024

User Stats

235
Posts
166
Votes
Dani Beit-Or
  • Investor
  • Irvine, CA
166
Votes |
235
Posts

How Would You Structure A 1031 on a Primary?

Dani Beit-Or
  • Investor
  • Irvine, CA
Posted

If my wife and I own our own house which have appreciated well over 1 million, and I would like to use a 1031 exchange in order to defer taxes - 
I have these questions, let's assume we purchased it for $1 million, and it's now worth 2 million dollars and I lived in it for the past 3 years as my primary residence.

1. Will I still be able to use the $250,000 per spouse exemption on the appreciation, and how will this impact my 1031 exchange?

2. In order to benefit from a 1031 exchange to defer my taxes will I need to convert my primary residence into a rental property and if I do, what's the minimum amount of time that I need in order to hold it as a rental to make sure it qualifies for a 1031 exchange?

3. Say we rent it out for 1 years after we move out - will the defer amount in the exchange be our entire appreciation?  only the appreciation gained during the leasing period? and how will the $500k exemption play into it? 

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