1031 Exchange - How to split the funds

[Diana Medina]

Hello.

I’m closing on the sale of a property and have the option to roll over the gains into a 1031 exchange. I’ve identified a new investment and can use part of the funds to finance the new purchase. I can identify a second property to use the remainder of the funds. Questions:

1. Cash in now and pay the tax on the capital gain (held the property for 18 months, so the tax, I’m told, is lowered to 15%

2. Roll the funds over into 2 new properties, 1 flip, 1 rental and defer the tax bill again. It seems the deferral can be done indefinitely.

3. Is it possible to avoid the tax altogether on a 1031 exchange by owning the flip for 5 years and living in it for 2 years, if the capital gain is under $500k

Any RE Accountants available for a consultation?

Thanks for the feedback!

Diana