Need help sell or rent

[Jose M.]

Hello, I have a mortgage on a duplex. ($1,200) a month includes taxes and PMI. I have not rented the upper unit since my wife closed her group home upper unit. I mention to her we might as well buy a single family house and pay that much. I can not get another FHA loan, so I was wondering if my wife can get a loan and should I keep the duplex for rental. I can get $900 lower and $600 for upper. Is it worth the hassle. That would give me $300 extra a month but im afraid of water bill and maintenance. Please help with some guidance.

[Matt Casey]

Hi Jose, 

Section 1031 of the Internal Revenue Code provides an exception that allows you to defer payment of capital gains taxes when you sell business or investment property if you reinvest the proceeds in similar property through a like-kind exchange. A like-kind exchange means you can exchange property used in your trade or business or held for investment for property to be used in your trade or business or held for investment. Thus, the phrase 1031 exchange was coined from the parameters of this tax code. This may seem simple enough, but there are many steps to take and requirements to meet when actually going through the 1031 exchange process.