The questions here were received from interested 1031 exchangers visiting my website. I have chosen to leave the questions intact with their ambiguity, shorthand writing and misspellings so as not to act on the assumption as to what when unclear the questioner meant.
Turning a 1031 Exchange into a Private Residence, Part 3
If you're the ‘get rich quick type,’ skip the 1031 exchange – it's not a scheme for the person who likes immediate gratification. It's a long-term real estate strategy that works for those who are patient and work deliberately to maximize capital gains.
Here's how a 1031 exchange makes your money work for you – say you have a personal residence and an investment property – with exchange planning, you sell your investment property and exchange it with a property in a location where you want to move to for retirement or for other reasons. You can do this after a two year rental. You can move into the exchange property as your primary residence, and sell your former primary residence with no taxes on the the adjusted gross plus the $250,000 exclusion for each person on the deed.
If we sell our current rental property and we do a 1031 exchange on a single family residence, how long is one required to maintain that property as a rental, or investment, before we can claim it as a primary residence? We are looking to find a place where we might want to retire down the road.
The rule of thumb in a 1031 exchange to be safe is two years. That will often be two different tax years — and remember to depreciate the rental.
did 1031 last oct., then moved into property 9 months later after breaking up with wife, we then sold are joint house she bought here own house in aug., I filed for divorce in june, what happens if i don't divorce her, is their enough " SPECIAL circumstances" or what would u advise
A situation like this may call for getting creative. Nine months is not two years. I would recommend moving out of the house you occupied 9 months after your exchange and rent it. That is safe. All else is “facts and circumstances” caused by personal choices, not situations imposed upon you such as “my house burned down.”
About Marilee: Role of Marilee Hill, Registered Representative (RR)
When you talk to Marilee Hill, you’re talking to a 20 year real estate professional with FINRA certification who understands the ins and outs of 1031 exchanges and sophisticated real estate deals.
Want someone who understands the technical side of the business as well as working with people? Marilee Hill has helped many clients to achieve their 1031 exchange goals. This takes work and a dedicated attentive assistance toward the end goal. Marilee Hill is reliable and knows about how to help clients successfully pull off a 1031 exchange.