1031 Exchange & Investments? I have two questions?

1) If I got equity out of my current property to purchase another property, for investment, could I defer the taxes or is it mandatory that I sell the property to purchase another to file 1031 exchange for my taxes? How can I purchase several properties, at once, with less money down. I have ony 15K to work with.

3 Answers

  • 1 decade ago
    Favorite Answer

    No! you have to sell an investment property and purchase another within a certain time frame for a higher valued property to qualify for a 1031 Exchange.

    As far as purchasing several properties at once with just $15,000 you need to shop around and find someone to finance U with little or no money down.

    Good Luck

  • Anonymous
    1 decade ago

    make sure that you state that your sale is contingent upon a 1031 exchange arrangement. Otherwise, it will be disallowed and you will have to pay capital gains tax upon the sale. You have 45 days to identify an exchange property and 180 days to close on the new property. If the identified property fails to close or sells to somebody else, you will have to pay capital gains tax. If you wait for 46 days to identify an exchange property you lose your 1031 status. Lots of rules!!

  • Anonymous
    1 decade ago

    you need to sell and then reinvest in a similar asset so no capital gain or loss is recognized allowing the deferment of capital gains taxes

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