All Forum Posts by: Jackson Hanssen

Not without the following details:

1. tax residency, and location of the physical asset for nexus allocation calcs
2. personal tax filling status
3. Marginal rate or expected income earned outside of this investment. 

In answer to your original question, you'll need to run specifics on your total taxable gain and the character of the gain, 1250 recapture or capital gains. Then you'll need to review your personal tax characteristics to determine how much tax you'd have to pay on that gain. Then you can do a full comparison. 

Generally if you're buying another real estate asset, and you qualify, you should always be 1031'ing. 

 No, those expenses would be deducted in the years they occurred unless you've made an odd election to capitalize them.  

1. It depends on your state, filling status, and type of gain passed through. As an example section 1250 gain is taxed like ordinary income, in contrast generic capital gains has a much lower rate. We can't really answer this without specifics. 

2. No, an LP interest in the partnership is not eligible for a 1031.

@Jill F. Okay that makes sense. Given that I think TIC is really your only option to ensure a valid 1031 exchange and get into the property you're talking about. Perhaps you could form an LLC later on down the line to clean up the structure after some time.

That way you'll be able to do clean 1031's with your new partner from property 2 --> property 3 ect.....

This seems viable with a TIC approach. Could you merge LLC-B and LLC-A before the sales process and do a cleaner exchange? I'd think you'd need to list both addresses as the replacement property concurrent with the single APN. However, so long as you're spending the same amount multiple replacement properties is allowed either way. I think you could split after sale for a non-taxable event, the total basis transferred in would be split across the two "new" properties.

Calling @Dave Foster to give his insights here, lots going on in this one.

Confirming what @Siraj Alsafar said, you can 1031 any real estate held for investment or business purpose, including SFRs. 

To comment on the bigger thread, commercial is generally better, but requires more capital. Residentially is a little more messy and has more risk but is easier to get into.

It will be hard to use your daughter's special buying status and do a 1031. For a 1031 to qualify for the tax deferral the same taxpayer needs to be on title for relinquished property and replacement property. I'm assuming your daughter isn't on title for the property you're selling. 

If you wanted to get her assets/credit up you could add her to the title/loan post closing.

Absolutely, happy to help however I can

No. To take advantage you have to sell an investment or business property and buy an investment or business property.

In theory you can 1031 your old rental property into a newer and nicer investment property that you eventually make into your personal residence. However, that would take a year or two in order to not be voided as exchanging investment real property for personal property. 

Depending on the built in gain and how long you've lived there, you should be able to sell your current primary tax-free and roll any gains from that into your new primary residence, that is IRC section 121.