All Forum Posts by: Joe Anderson

I'm selling an investment property for $915,000, commission is $35,000. My original purchase price was $550,000, and I've depreciated about $50,000. I financed it 100%, and have been paying interest only, so I still owe $550,000.

In my original reading up on 1031s, it seemed as though I could just do a 1031, buying a replacement property for at least my realized gain (about $380,000) and avoid any income taxation on the sale.

But after more reading, that doesn't seem to be the case? I would have to buy a replacement property with at least $550,000 of debt and at least $380,000 of equity? Is that right? Just wanted an understanding of this before I meet with a 1031 expert.

Thanks.

Thanks Eric...I figured the "buy and rent a house to your brother" thing would be frowned upon. I guess I was looking for info on what is doable (i.e. legal) and what's not.

Let's forget my brother is in the equation at all...

As I understand it, people buy apartment buildings to facilitate 1031s all the time?

So would buying a house and not living in it, but renting it out, be any different?

As far as how I will be taxed on the sale (if I didn't do a 1031)...would it just likely be a straight 15%? Or will this year's lower cap gains rate lower things? How about the fact the property has been depreciated about $35,000 in the last few years - that's not going to bump me up into that "special" 25% bracket for this transaction, is it?

Thanks again.

So here's the story...I'm selling a property (business property) in the next month, and will have about a $370,000 taxable gain.

Meanwhile, my brother is looking for his first home, probably in the $175,000-200,000 range. He's very young, but has great credit and a good steady income.

I'm wondering if it's possible for me to do a 1031, buying a home that I will rent to him? It seems the ideal thing would be to actually sell it to him and amortize things so he builds equity and gets the deductions while I get some income, but I'm assuming that would make the 1031 idea moot?

Is there any way that we could use the tax law concerning gifting to our advantage, so I could somehow rent it to him (thus hopefully utilizing the 1031 and getting some income) but then ultimately gift it (or portions of it) to him, so he would eventually be the owner?

How about a rent-to-buy agreement of some sorts?

Seems very convoluted, I realize, but just curious. I'm meeting with my accountant in a week and would just like some ideas before meeting. Thanks.