All Forum Posts by: Nick Markovsky

Thx for the info.  A valuation question then, if the replacement property is of lower value than the sold property by say 20%, would I then pay only 20% of the cap gains + depreciation recapture tax that would have been due or is it an all-or-nothing proposition?

Thx for the replies.  Here are some valuation specifics:

- Rental prop value: $530k with $160k equity

- Will sell current primary residence for $850k with $150k equity

- Looking to roll all $310k equity into a new primary rez that has a rentable unit or guest house to rent or use as business office thus satisfying business asset criteria.

- New Primary residence value to be in the neighborhood of $900k-$1m, give or take.

- So, Uncle Sam is holding his hand out and I'll be on the hook for roughly $70-$80k in cap gains and depreciation recapture.  I'd prefer to give him a high five instead of that cash...    :)

- The main question in my mind is the valuation of the guest house.  Getting it valued ABOVE the rental property sold will be tough, I think.  Any thoughts on how to make it work via 1031 or otherwise?

Hello 1031 pros!

I am preparing to move primary residences and at the same time, sell a rental property that's been in business use for about 10 years.  I am seeking to 1031 out of the rental and into a 'mixed use' property consisting of a main house that we live in and then a guest house that I would either rent out for 1-2 years or use as a business office for an established business that I've operated for 5-6 years and paid taxes on, etc, etc.  As I understand it, provided the 1031 is constructed such that the value of the guest house is allocated properly (i.e. 33% value assigned to guest house, balance to primary rez) then it would likely pass 1031 muster.

Has anyone here been party to an exchange like this that dances in these grey areas?  Please chime in with advice or experience...as well as potentially a QI in So California area who knows what's what.

Thanks very much!

Nick M.