How long until I can 1031 my primary residence-turned-rental?

[Jon Schwartz]

Hi all,

I’m buying a new house. If I keep my existing home as a rental, how long must I hold onto it until I can sell it and use the profits in a 1031 exchange?

Thanks!

[Ashish Acharya]

Originally posted by @Jon Schwartz:

Hi all,

I’m buying a new house. If I keep my existing home as a rental, how long must I hold onto it until I can sell it and use the profits in a 1031 exchange?

Thanks!

 If your gain is less than 250k or 500k married there is no point in doing 1031 exchange. If you do 1031 exchange in anything next three years after you move out, section 121 would wipe out your gain, so there’s is no gain to defer with 1031. You would just be wasting time and money coordinating 1031.

Sec 121 will be applied first before 1031. 

Just sell it with in 3 years and buy another property with the tax free gain. 

You will have small tax with depreciation recapture.