Doing a 1031 within my SDIRA

[Vic Caldwell]

I just did my first 1031 exchange selling a single family and buying a 4 plex. I did this outside my SDIRA (Self Directed IRA). It got me thinking about using the 1031 exchange within my SDIRA. Here's my thought process..... The purpose of the 1031 is to push capital gains (which are higher than normal tax rate) to some date in the future. What about within the structure of a SDIRA? Profits within my SDIRA aren't taxable until they are withdrawn and then they are taxed at your then current income bracket rate. Would that mean that any capital gains realized on property within the SDIRA will not be taxed at the then capital gains rate but at the lower personal income rate. If that's the case then there is no real reason to do a 1031 on property within the SDIRA because I'm not really gaining any advantage. Right?!?

I am interested in the thoughts of others here. Am I correct or am I missing something? Please let me know.

Vic

[Dave Foster]

@Vic Caldwell, No reason to do a 1031 inside your SDIRA because it is all tax deferred anyway.  Inside your reitrement accounts simply buy and sell.  Outside you've got the 1031 option.