1031 Exchange Questions - trying to figure out why or how to use

[John Hyatt]

Hello,

I am a newbie when it comes to 1031 Exchanges, I have a couple of questions. I have always heard about them, but don’t really know anyone who has done it successfully. Here are my questions:

1) Can you have more than one 1031 exchange strand going? For example, two houses or more each worth $100k and you 1031 exchange each one separately into a $150k house and repeat every year?

2) What happens when you eventually sell a house/complex/entity that was 1031 exchanged? For example, you exchange up for years and then one day sell. Let’s say you started with $100k house or duplex and are now at a $1m house or complex after 10 years and just want to cash out are you taxed on everything or just the profit from the most recent exchange?

3) Let’s say you 1031 exchange up until you decide to just hold onto a property and keep it until the day you die. What happens after you die?

Thank you in advance!

-John

[Bryan H.]

My understanding is you can 1031 until you die. Your beneficiaries would receive the benefit of the 'Step Up in Basis" 

No one pays the taxes on gains