Lisa taylor, 1031 exchange expert (1031 sponsors)

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Rainmaker
895,525
Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

OK you SO need to go to your qualified intermediary on this.

If it is not your primary or even if it WAS (and you converted it, the guy with the chops will know) go over your unique scenario with your 1031 guy.

Real property IS 'like kind' as opposed to, say, stocks.

I know plenty about 1031s and have done my own and others. This is a place to get resources, not anwers when the IRS is concerned.

ALSO as Greg mentioned . . . you will have short term cap gains if you flip! 

Jan 31, 2020 06:45 AM
Rainmaker
1,232,697
Thomas J. Nelson, REALTOR ® e-Pro CRS RCS-D Vets
Big Block Realty 858.232.8722 - La Jolla, CA
& Host of Postcards From Success Podcast

It has to have been a rental property, not just a flip.

That said, you need to chat with a 1031 Exchange Expert and here he is:

Bill Exeter and here's more info too:  

1031 Exchange and Taxes, Oh My! 

Jan 31, 2020 08:14 AM
Rainmaker
991,615
Doug Dawes
KW Evolution - Topsfield, MA - Georgetown, MA
Your Personal Realtor®

Candice A. Donofrio has your answer. 

Jan 31, 2020 08:02 AM
Rainer
117,268
Karen Climer
Demetree School of Real Estate - Orlando, FL
Teaching people to pass the real estate exam

I can't even do my own taxes without help, so I'm certainly not qualified to help someone else with tax advice.

Jan 31, 2020 07:20 AM
Rainmaker
522,941
Greg Cremia
Shore Realty of the Outer Banks - Nags Head, NC

If you buy and flip it will not be a long term investment and will not qualify. Rent it out for a period and it will qualify.

Jan 31, 2020 04:01 AM
Rainer
136,405
Bill Exeter
Exeter 1031 Exchange Services, LLC - San Diego, CA
1031 Tax-Deferred Exchange Expert

Hi, Thomas J. Nelson, Realtor e-Pro, CRS, RCS-D, Vets 

Thank you for the shout out!  

Hi Lisa taylor 

The crucial issue is your intent.  You would have to show that you intended to hold the property for rental, investment or business use should you get audited.  It does not have to produce cash flow, but just has to be held for investment.  Properties held for sale (flipping, renovation, builders/developers) generally do not qualify because they are bought with the intent to hold for sale and not for investment.  It sounds like you had the intent to hold for rental, but your business plan for the property has changed.  You will be fine and will qualify for 1031 Exchange treatment as long as you can explain why you had a short-term hold.  It also sounds like you did not actually renovate, so it will not look like a rehab/fix/flip transaction.  

The best approach is to report and file as property held for rental/investment, document your strategy for switching, and move forward. 

Jan 31, 2020 08:59 AM
Rainmaker
1,154,075
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

Completed two recently.  There are scheduling restrictions.

Real property to real property. It used to be you can exchange a SFH for a Laundromat.   Real property can be anything income producing or not.

Jan 31, 2020 07:42 AM
Rainmaker
1,723,555
Lyn Sims
Schaumburg, IL
Schaumburg Real Estate Agent Retired

There are plenty of online forums that will help you with this but Greg is correct. You have to make it an investment first.

Any RE attorney can help you in your area.

Jan 31, 2020 05:35 AM
Rainmaker
822,252
Olga Simoncelli
Veritas Prime, LLC dba Veritas Prime Real Estate - New Fairfield, CT
CONSULTANT, Real Estate Services & Risk Management

Best to consult an accountant that specializes in this.

Jan 31, 2020 04:59 PM
Rainmaker
645,848
Tony Lewis
Summit Real Estate Group - Valencia, CA
Summit Real Estate Santa Clarita & Aliso Viejo

I strongly suggest that you get tax questions answered by professionals and not on a q & a forum.  CPA is the best option.

Jan 31, 2020 01:37 PM
Ambassador
3,058,272
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate

I would not take the advice here as gospel.  

Consult with a qualified 1031 intermediary. There are too many moving parts that this broad question may not address.  

 

Jan 31, 2020 12:49 PM
Rainmaker
5,571,934
Barbara Todaro
RE/MAX Executive Realty - Retired - Franklin, MA
Previously Affiliated with The Todaro Team

Candice A. Donofrio gave you the best guidance...., Greg Cremia , too

Jan 31, 2020 09:17 AM
Rainmaker
4,046,379
Richard Weeks
Dallas, TX
REALTOR®, Broker

You need to talk to a good qualified intermediary in your area.

Jan 31, 2020 08:39 AM
Rainmaker
6,613,253
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Go to the IRS website.

Jan 31, 2020 08:26 AM
Ambassador
2,571,397
Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

Candice A. Donofrio is on it.

   I suggest, see a tax attorney and/or talk to your QI.

Jan 31, 2020 08:04 AM
Ambassador
4,259,392
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

Seek a 1031 exchange facilitator - they will guide you in the right direction.

Feb 01, 2020 09:51 AM