All Forum Posts by: Eugene Cheng

Thanks Bill. Could you PM some CPA recommendations for this matter? I am in bay-area CA.

Hi 

Anybody is aware of software tax service that supports section 121 exclusion for the tax-free boot? specially the property relinquished was my home in the last 2/5 years period. I have been using Turbotax for my returns but I couldn't figure out how to get Turbotax understand this specific 121-exclusion, even their supports can't figure that out either.

I am reaching out to CPAs but I still wonder if such software exists?

Thank you Davie. If you know a great DST broker could you PM me?

Thank you Rob: how do I find a specialist? I mean every broker I approach would claim he/she is one.

So just to make my long email more concise:

1. how to evaluate/compare DST broker (like realtors)?

2. how to evaluate/compare (multi-family) DST deals?

I am in the (extended) identification window and looking into the DST options. I have been in touch with a few brokers like 1031cwondfunding, realized, and some smaller local ones.

I often see a DST offered by all of them with similar fees. So how do I pick one from the other? can I use that to my advantage to negotiate a lower broker commission?

I see people emphasizing the due diligence on DSTs. However, reading these PPMs is a major headache due to lack of any experience and background in commercial real estate -- I've only invested in small residential properties (1-4 units). I know how to evaluate these residential ones but I have no idea what/how to check a 200-units apt DST!

So how can I learn to evaluate multi-family DSTs? simply listening to the brokers' sale pitches is equivalent of flying blind to me.

Thanks.

(I know the general pros / cons of DSTs and I am not committed to invest them. But I would like to learn my options as much as possible, given the low RE inventory on the market)

@Dave Foster thank you again for the terrific and clear answer. the 1031+121 combo really offers the best flexibility!

@Bill Exeter thank you for the detailed reply. To allow more time for search, can I "pre-"identify a replacement that's already in contract (with me) and just make sure its escrow is after my sale? In other words, I can start buying while my house is still in escrow?
 

@Frank Chin. Rev-exhg is a lot more flexible except I don't have that capital :-/ and Yes I plan to call a few QIs after this long weekend :-)

I am planning to sell my SFH rental to exchange for MFH. However I have not yet settled on the exact type and location of the replacement properties. I have been looking from 3-4plx in over CA bay-area and Sacramentor, to commercial ones in Texas. Do I have to buy the exact property that I identified in the 45d window?

Some website says IRS mentions the final replacement property needs to be "substantially the same". But that's really vague -- is a 4plx 30 miles away from the identified 3plx good?

I am curious how people do: for example, I might identify 3 properties (or a few more w/ 200% rule) after day 20. but lets say at day 44 a different property comes up that I really like which is not quite "substantially the same" of the identified ones. Can I change?

What's the general strategy to allow the biggest flexibility?

 Also I tried to find the IRS code 1031 section original text but couldn't. Anyone has a good pointer. All the information I have are from various website but I like to get to the original source.

@Dave Foster. Thank you for the detailed reply. Super useful!

In your example assume the original house has a mortgage of 300K, do I still need to get $300K+ mortgage of the $700K+ replacement property? my understand is no (e.g. I can get a mortgage of only 200K) but I am not sure.