Please help me (1031 exchange)

[Maria Felix]

BP family -

Hope everyone is doing well. I'm completely confused please help me understand this 1031 exchange.

I have a cash buyer that wants to buy one of my rentals property for 234K that I purchased 10 years ago for 54K. We signed the contract and looking to close on the 7th of July. Now, my questions are:

1-Do I need 1031 exchange to avoid paying the capital gain tax given that I own the property for more than 10yrs? If so, is this before the closing or after?

2- do I let the buyer know now this is a 1031 exchange?

3- where do I begin? Who do I contact? I live in NYC and the property is in Florida.

4- can I use that profits to invest in more than one property?

Any insight that anyone can provide will be extremely appreciated.

Please excuse my grammar English is my second language.

[Brad Hammond]

Hi @Maria Felix, you need to contact a qualified intermediary ASAP.  They will be the ones that process your 1031.  I'm not sure if they need to be in FL or NYC but I would try NYC first.  You should also be looking for your next properties to invest in now since there is a tight window (45 days) to identify your next properties.  

1. Yes, you need to 1031 to avoid capital gains no matter how long you've owned it.  This is done before closing, you will never have possession of the funds.  

2. You should let the buyer know.

3. See above.

4. Yes, you can invest in multiple properties but it makes it a little harder since you are juggling more balls in the air.