All Forum Posts by: Jennie Chen

Thank you @Dave Foster. so are my understandings correct? 

1) IRS does NOT care if the final transaction value turns out to be much much much higher or much much much lower than whatever I filled out to be the value of the property on the identification form.

2)  my idea ONLY works if the improvements are physically done before the closing. otherwise it will be considered exchanging into property+contract, and that's not like kind.  and in this case, continuing the above example, sales contract is modified into 500K,  exchange admin pays out 500K to the title company, title company is instructed to pay 230K to the seller, and 270 to the contractor who has already completed the work. is this right? 

@Dave Foster  thanks! it's very clear. yes the example is indeed awkward :) i was trying to simplify things. thanks you!

@Dave Foster  thank you. are you saying if on the identification form (yes i had only 3 properties on that form) the value of the replacement property is filled out as 200K, and if i end up buying this property for 500K, the IRS will be OK with that? 

if so, then why don't I just ask the seller to sell it to me for 500K, have them contract the 500-230(agreed purchase price)=270K renovation work with my general contractor, and at closing I assume that contract? no problem for IRS audit? 

thanks a lot for a clarification.

Hi Dave @Dave Foster, thank you very  much for the response. I am not sure I completely understand, i think it's because I am not too clear in my question. 

Let's say property A was bought for 100K and sold for 200K, property B was bought and sold for 100K (no capital gain). they both went into ONE exchange.  and I bought a replacement property of 250K.

then there's 50K left that will be taxed for capital gain. and similar to your example, if this 50K is attributed to property B, then there will be no capital gain becasue there's no capital gain on property B. if it's attributed to property A then will be some capital gain. So I am wondering in the case both properties went into ONE exchange account, how will this 50K excess be treated? thanks very much for a further clarification.

I sold 2 properties going into a 1031 exchange. it looks like i might have some leftover funds that will be unused and taxed on capital gain. my questions are:

1) do i have a choice which property's proceed that excess belongs to, in order to have the minimum capital gain/depreciation recapture? 

2) want to confirm that my operating losses from other properties (passive losses up to 25K, given my gross is low) this year can be used to offset the capital gain (but not depreciation recapture). is this understanding correct? 

thank you very much.

Hi I am doing a 1031 exchange. 330K in the fund, only one of the 3 identified properties is going to work out, and on the form the value of the property was 200K, i will end up buying it for 230K. this property is currently vacant, i will need to put in 600K to renovate. 

my intermediary tells me that the final price can not be 25% more or less than the 200K I filled out on the identification form. question is: is there a way to put the leftover 100K (330-230=110) into renovation somehow?  Thank you.