1031 or REIT Holding Options for selling LTR and Protecting Gains

Rental Property Investor · Ypsilanti, MI · Member since 2018 · 14 posts · 0 votes

I am looking into options for selling one of my properties. It is a quadplex that has appreciated well and looking to leverage into a larger property.

I am curious if there is a way to sell the property and place the profit into a essentially delayed 1031 to be used to purchase another property and avoid Capital Gains Tax.

Anyone know of anything? Can I roll it into a Construction Loan, temporary trust, etc?

Need your creative brain power. Thanks in advance!

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Dave FosterBusiness Member
Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
4y
@Chris Stranad, You can do a 1031 exchange. That is a sale of investment property followed by a purchase of investment property. You will be stuck with some timelines that cant be moved. But the 1031 would allow you to defer all tax and depreciation recapture.
A reverse exchange let's you control your new property before you sell. your old property. But it only has a 180 day window. So construction is tough to make work with a 1031 reverse.
Your other options listed will not work because they do not involve the purchase of replacement real estate.
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