Tax implications of a 1031

[David Green]

Tax implications of a 1031

I am trying to understand the tax implications of doing 1031 exchange on an investment property.

I have an investment property that I lived in for 8 years and then rented for 5.

I will have about 60K in gains and I depreciate about 5K/year on it.

I am considering rolling it over into a larger rental and then slowly improving the property.

Do you have to pay depreciaion recapture and capital gains on the years that you lived in a property or only the years that it was rented, if you do NOT qualify for 2-of-5 rule?

If I move into the 2nd property after a few years, how does the "capital gains tax exclusion" work with the liability that gets rollod over in a 1031?

Any advice or guidance would be appreciated.

Thanks