I am doing a Reverse 1031 exchange. There is a possibility that the Net Proceeds of sale may be more than the purchase price of the new property. So I am trying to minimize any Capital Gains taxes I might have to pay.
How do I account for these expenses relating to purchasing the property:
1031 exchange fees,Attorney fees etc.
Appraisal fees
Inspection fees etc
Do these fees add to the cost of the purchased property in terms of the 1031 exchange?
The purchased property in another state. Can I also add the cost of the airfare, hotel, car rental, food, gas etc to the cost of the property being purchased?
I have a follow up question to the above. Since we flew to a few other states too to look at properties, can we add all these costs to the purchase price of this purchased property? If not, where do these expenses go on the Tax Return?
Based on the above, what is the best way to minimize any potential capital gains tax especially since I am a resident of CA.
Thank you.