All Forum Posts by: Hussein Salama

That should have been disclosed. There should be a line that says something to the effect of does the seller know of any future plans/development that could affect the house. But, it also shows how slow the process is if it didn’t affect the last two owners. 

If it’s less than a year you have to sell to them ASAP because you won’t be able to rent it out and they might change their plans. But then I wonder why they didn’t just buy it from the person selling to you? Heck, why didn’t the seller contact them? Did you pay more than the city is offering?  If it’s more than a year start renting it out and make money while it appreciates. You’ve already paid the acquisition costs. 

@Hussein Salama,  Your 1031 is effectively over.  Your accountant has filed the 8824 with your tax return and your new depreciation tables and basis are now just part of your tax return profile.  Basically you just own a property that you acquired through a 1031.  So the basis has been adjusted.

Your options at this point with the property in general.

1. Hold.  No impact on the past 1031.

2. Sell and do not 1031 - you pay the tax that was deferred and tax on any new gain or new depreciation recapture.

3. Sell and do a 1033 exchange.  These are much more simple than a 1031 and your timeline is greatly extended.  You do not have to use someone like a QI for a 1031.  Your accountant will direct you so it gets reported correctly. - No tax

Ask them if they ever reached out to the seller. They were duty bound to disclose it to you. If not, ask for a timeline, this could be years in the making, or never happen. If not, it could turn in to a small money pit as you continue to hold it vacant waiting for their money and then incurring fresh closing costs. 

Wow, that is unfortunate timing. Did they provide the timeline? Do you have any options for contesting it?