1031 Exchange on Small Owner-Occupied Multifamily

[Lindsey Iskierka]

My husband and I are selling our triplex here in Long Beach, CA. We purchased it in September 2016 and have a significant amount of equity that we will use to purchase properties with cash out of state.

We lived in the triplex from September 2016-March 2019 and have not sold a property before. My question is do we need to do a 1031 exchange? I believe there is a one time exemption and will not have to pay taxes on this sale. My husband believes we will be taxed on the other two units that we rented out, but exempt on our portion of the property.

We are currently in escrow so if we need to do a 1031 exchange we need to know ASAP. We can’t seem to find a direct answer. Thank you in advance!

Lindsey

[Ashish Acharya]

Originally posted by @Lindsey Iskierka:

My husband and I are selling our triplex here in Long Beach, CA. We purchased it in September 2016 and have a significant amount of equity that we will use to purchase properties with cash out of state.

We lived in the triplex from September 2016-March 2019 and have not sold a property before. My question is do we need to do a 1031 exchange? I believe there is a one time exemption and will not have to pay taxes on this sale. My husband believes we will be taxed on the other two units that we rented out, but exempt on our portion of the property.

We are currently in escrow so if we need to do a 1031 exchange we need to know ASAP. We can’t seem to find a direct answer. Thank you in advance!

Lindsey

Your husband is right.

Also, there is no “need” to 1031 unless you want to defer taxes on those two rented units. 

If you want to defer taxes, then yes your time is running out.

Talk to @Dave Foster.