Related Exchanges and Boot, Part 1

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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.

Related Exchanges and Boot, Part 1

Question:
Hello, \n\nWe are selling a 4 plex ($1.36 million) which we did not live in and buying a triplex (equal sq footage per apt ) (1.85 million) which we will live in one and rent the other two.\nWe were told we would have to buy something more expensive so we would not have to pay taxes on the 4 plex.\n

Answer:
You’ll need to determine the square footage of the unit you want to live in, and what percentage of the three units your new home unit represents, by square footage. Based on these percentages, the price of the two units you are renting need to be $1.36 million. If they are not, you will owe taxes on the difference, i.e. two units are worth $1.1M, so taxable is $260,000.

About Marilee: Role of Marilee Hill, Registered Representative (RR)

With a wealth of experience in real estate and 1031 exchanges, Marilee helps people to deal with a complex real estate process. Her long experience with her own properties and having real estate broker licenses in three jurisdictions help.

Marilee likes helping clients to understand the ins and outs of a real estate deal. With her combined more than 20 years as a commercial real estate Broker plus another 20 years with FINRA licenses Marilee has the experience to help clients to plan adequately for a real estate future. Let Marilee help you with a real estate portfolio that needs a guiding strategy in terms of tax regulations and more.

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Marilee Hill, MA Hill