All Forum Posts by: Paul Gamber

Hello!

I am very new in investing and am confused on whether I need to use a 1031 exchange here:

I currently own a condo that my mother lives in rent free. I don’t have a mortgage on it. I bought it for her in 2016 for 75k. I’m now planning to list it for $170k. We are purchasing a duplex (just went under contract for it), and she will live in one unit and the other has a long term tenant. 

My plan was to use the condo heloc as the down payment for the duplex, and then sell the condo and the proceeds would pay off the heloc. 

Now I’m wondering, is this allowed? Or am I going to be paying taxes on the money I’m using as the down payment, since it’s not technically going through a 1031x? 

Lastly, when we sell the condo, can we keep the 75k + 4k renovation costs for ourselves, and then put any remaining money after the heloc is paid off into a 1031x to then invest in other properties?

Thank you for your help!!