If one does more than one 1031 Exch in a year, does the IRS look at each 1031 exch separately or can I combine the 2 exchanges I am doing?
The reason I ask is because in the second transaction the new property I am thinking of buying is less than the property I am selling.
Thanks in advance for your replies.
Be prepared to pay some income taxes.
If you mean can you sell one property and substitute it with two properties which are individually less expensive but together add up to a higher value than the property you are selling, I believe the answer is that you can do that if you structure it correctly from the beginning, as a single 1031 transaction.
On the other hand if you are doing two completely separate transactions, they are treated separately. So if you are replacing one property with another one of lower value, you will face tax on that difference in value.
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