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Updated almost 6 years ago,
1031 Exchange "the like-kind rule"
I have a single family unit home that is going to be sold for $1.2M.
I want to do a 1031 Exchange, but confused what my next property purchase needs to be. Single, multi, commerical..
The new property I want to exchange for is worth $2.5M.
I read online that as long as the like-kind property is used for rental, business or trade, or investment then it is suitable for the exchange.
I'm still not clear about finding a like-kind property. So, if I sell the single family unit house for $1.2M, could I exchange for a 5+ unit commercial property? Because, the exchange purpose is to select property that will generate me income, correct? Could I live in this property too?
Also, when applying the 1031 exchange, the next property cost should be higher than the initial property sold correct?
Need clarification about the 1031 and purchasing a like-kind property
Thanks
Airyca