In a 1031 exchange.....
so that I do not have to pay any Capital Gains Taxes do I have to reinvest ALL of the sales proceeds in a 1031 exchange?
In other words...
If the property is sold for $400,000 and the mortgage on it is $150,000, then what is the amount that I should re- investment so I do not have to pay any Capital Gains Tax?
If the property is "sold", it does not qualify for a 1031 exchange....
In general, in order to qualify for a 1031 exchange, the property you receive should have at least the same value as the property you give up.
-- Arthur Rubin, CRTP Brea, CA
Here we go again. It depends on who is doing the selling - a qualified intermediary can "sell" as part of a 1031 transaction.
What exceptions are there? One is if the property still qualifies for a principal residence exemption.
Right. Technically it's considered a trade, but someone buys and someone sells, general to third persons. It's not actually what most people would call a trade.
Sort of. Technically you can qualify for a 1031 exchange even if the property you buy has a price lower than the property you sell. However you just need to recognize the difference as taxable income.
In the case of a property that can qualify for the principal residence exemption, there's still taxable income, but another exemption that applies.
On Thu, 11 May 2017 14:00:52 EDT, Jessica wrote in
$400,000 should be reinvested.
AND .. not less than $250,000 [$400,000 minus the $150,000] of the "reinvestment" should be "in cash" i.e. not borrowed.
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