1031 exchange ?

[Jason Vo]

Can I sell 2 rental SFR then buy just 1 appartment unit which is greater value than 2 SFR ? Is this apply to 1031 exchange for both SFR or only 1 to 1 ? Please advice :idea:

[Dale Osborn]

You can do as many properties as you want on either side to complete a 1031 exchange. There are different methods of identifying the properties to exchange into in the 45-day identification period. The most common is identify 3 properties (3-Property Rule) and within the 180 day period from the sale of relinquished property you must close on one of the properties. Then there is the (200% Rule) where you identify as many properties as you want to, BUT the total value of all the properties cannot exceed 200% of the value of the property sold (relinquished property). Then there is the (95% Rule) where you identify as many properties as you want, BUT the properties you buy must equal at least 95% of the total value for the identified properties. The 200% Rule & the 95% Rule are too difficult to match so most just identify 3 properties and close on 1 of the three. If not and the 180 days expire - you owe capital gains taxes on the profit from the sale of the sold property or properties.