1031 exchange

Hello experts,

I am a 58-year old widow who owns one home (currently renting that one) and
has a substantial mortgage on another (which I'm living in). I want to sell
the first home (which I own outright) partly due to the fact I cannot keep
up on it's maintenance. I do not want to move back into it and I have not
lived there for four years. I am considering a 1031 exchange and obtaining
an equal or higher value new condo in another state and rent that out. This
way I will not have to worry about exterior maintence. I will rent that out
which will help to pay for my current mortgage. I do not work as I am
living off the rental income of the first home and my inheritance. Does
that sound like a good plan?

Re: 1031 exchange

Yup.
Or, sell the house on a contract and collect lot's of interest for 5-10
years that will more than pay the capital gains tax when it finally closes.
On a $200,000 house, you'll collect nearly $70k interest in 5 years at 7%.
Since you own it outright, you have several options. Maybe your current
tenant would even be interested in a deal. Contracts vary a lot from state
to state. You would still hold title, but would not be responsible for
upkeep. Even if they default, you will have made more than enough to pay for
the rehab needed to sell it again. Most of what you collect for the 5-10
years till it balloons will be interest. Taxable as regular income, but no
gains tax till it closes and you surrender title. Then, you can still buy
the next one and do it all again. You can make decent money on houses this
way even if you pay full retail for them.

Work the numbers and see how it works out for you.


"Spin" <> wrote in message
news:
> Hello experts,
>
> I am a 58-year old widow who owns one home (currently renting that one)
and
> has a substantial mortgage on another (which I'm living in). I want to
sell
> the first home (which I own outright) partly due to the fact I cannot keep
> up on it's maintenance. I do not want to move back into it and I have not
> lived there for four years. I am considering a 1031 exchange and
obtaining
> an equal or higher value new condo in another state and rent that out.
This
> way I will not have to worry about exterior maintence. I will rent that
out
> which will help to pay for my current mortgage. I do not work as I am
> living off the rental income of the first home and my inheritance. Does
> that sound like a good plan?
>
>

Re: 1031 exchange

Thanks. Regarding the 1031 exchange - I know I can sell the rental house
(which I own outright) and put the money into escrow and use the escrow
funds to buy and equal or higher value house. Now this is what I don't
know. I believe I have to show rental intent - by renting it out maybe at
least two weeks, then I can move into it, and sell the house I have a
mortgage and keep the $250,000 exemption. It's the second part I am not
clear on the tax law.

"Dan G" <> wrote in message
news:
> Yup.
> Or, sell the house on a contract and collect lot's of interest for 5-10
> years that will more than pay the capital gains tax when it finally
closes.
> On a $200,000 house, you'll collect nearly $70k interest in 5 years at 7%.
> Since you own it outright, you have several options. Maybe your current
> tenant would even be interested in a deal. Contracts vary a lot from state
> to state. You would still hold title, but would not be responsible for
> upkeep. Even if they default, you will have made more than enough to pay
for
> the rehab needed to sell it again. Most of what you collect for the 5-10
> years till it balloons will be interest. Taxable as regular income, but no
> gains tax till it closes and you surrender title. Then, you can still buy
> the next one and do it all again. You can make decent money on houses
this
> way even if you pay full retail for them.
>
> Work the numbers and see how it works out for you.
>
>
> "Spin" <> wrote in message
> news:
> > Hello experts,
> >
> > I am a 58-year old widow who owns one home (currently renting that one)
> and
> > has a substantial mortgage on another (which I'm living in). I want to
> sell
> > the first home (which I own outright) partly due to the fact I cannot
keep
> > up on it's maintenance. I do not want to move back into it and I have
not
> > lived there for four years. I am considering a 1031 exchange and
> obtaining
> > an equal or higher value new condo in another state and rent that out.
> This
> > way I will not have to worry about exterior maintence. I will rent that
> out
> > which will help to pay for my current mortgage. I do not work as I am
> > living off the rental income of the first home and my inheritance. Does
> > that sound like a good plan?
> >
> >
>
>

Re: 1031 exchange

There is no specific tax code regarding "intent". I've heard so-called
experts say anything from 6 months to 2 years of rental. It really depends
on the IRS investigator who's doing your audit. I'm pretty sure that "2
weeks" would not convince anyone. There's no rush to sell your current
residence either, you can rent it out for 3 years and still get the 250k
exemption.


"Spin" <> wrote in message
news:
> Thanks. Regarding the 1031 exchange - I know I can sell the rental house
> (which I own outright) and put the money into escrow and use the escrow
> funds to buy and equal or higher value house. Now this is what I don't
> know. I believe I have to show rental intent - by renting it out maybe at
> least two weeks, then I can move into it, and sell the house I have a
> mortgage and keep the $250,000 exemption. It's the second part I am not
> clear on the tax law.
>
> "Dan G" <> wrote in message
> news:
> > Yup.
> > Or, sell the house on a contract and collect lot's of interest for 5-10
> > years that will more than pay the capital gains tax when it finally
> closes.
> > On a $200,000 house, you'll collect nearly $70k interest in 5 years at
7%.
> > Since you own it outright, you have several options. Maybe your current
> > tenant would even be interested in a deal. Contracts vary a lot from
state
> > to state. You would still hold title, but would not be responsible for
> > upkeep. Even if they default, you will have made more than enough to pay
> for
> > the rehab needed to sell it again. Most of what you collect for the 5-10
> > years till it balloons will be interest. Taxable as regular income, but
no
> > gains tax till it closes and you surrender title. Then, you can still
buy
> > the next one and do it all again. You can make decent money on houses
> this
> > way even if you pay full retail for them.
> >
> > Work the numbers and see how it works out for you.
> >
> >
> > "Spin" <> wrote in message
> > news:
> > > Hello experts,
> > >
> > > I am a 58-year old widow who owns one home (currently renting that
one)
> > and
> > > has a substantial mortgage on another (which I'm living in). I want
to
> > sell
> > > the first home (which I own outright) partly due to the fact I cannot
> keep
> > > up on it's maintenance. I do not want to move back into it and I have
> not
> > > lived there for four years. I am considering a 1031 exchange and
> > obtaining
> > > an equal or higher value new condo in another state and rent that out.
> > This
> > > way I will not have to worry about exterior maintence. I will rent
that
> > out
> > > which will help to pay for my current mortgage. I do not work as I am
> > > living off the rental income of the first home and my inheritance.
Does
> > > that sound like a good plan?
> > >
> > >
> >
> >
>
>

Re: 1031 exchange

In article <> wrote:
>There is no specific tax code regarding "intent". I've heard so-called
>experts say anything from 6 months to 2 years of rental. It really depends
>on the IRS investigator who's doing your audit. I'm pretty sure that "2
>weeks" would not convince anyone. There's no rush to sell your current
>residence either, you can rent it out for 3 years and still get the 250k
>exemption.
>
>
>"Spin" <> wrote in message
>news:
>> Thanks. Regarding the 1031 exchange - I know I can sell the rental house
>> (which I own outright) and put the money into escrow and use the escrow
>> funds to buy and equal or higher value house. Now this is what I don't
>> know. I believe I have to show rental intent - by renting it out maybe at
>> least two weeks, then I can move into it, and sell the house I have a
>> mortgage and keep the $250,000 exemption. It's the second part I am not
>> clear on the tax law.
>>
>> "Dan G" <> wrote in message
>> news:
>> > Yup.
>> > Or, sell the house on a contract and collect lot's of interest for 5-10
>> > years that will more than pay the capital gains tax when it finally
>> closes.
>> > On a $200,000 house, you'll collect nearly $70k interest in 5 years at
>7%.
>> > Since you own it outright, you have several options. Maybe your current
>> > tenant would even be interested in a deal. Contracts vary a lot from
>state
>> > to state. You would still hold title, but would not be responsible for
>> > upkeep. Even if they default, you will have made more than enough to pay
>> for
>> > the rehab needed to sell it again. Most of what you collect for the 5-10
>> > years till it balloons will be interest. Taxable as regular income, but
>no
>> > gains tax till it closes and you surrender title. Then, you can still
>buy
>> > the next one and do it all again. You can make decent money on houses
>> this
>> > way even if you pay full retail for them.
>> >
>> > Work the numbers and see how it works out for you.
>> >
>> >
>> > "Spin" <> wrote in message
>> > news:
>> > > Hello experts,
>> > >
>> > > I am a 58-year old widow who owns one home (currently renting that
>one)
>> > and
>> > > has a substantial mortgage on another (which I'm living in). I want
>to
>> > sell
>> > > the first home (which I own outright) partly due to the fact I cannot
>> keep
>> > > up on it's maintenance. I do not want to move back into it and I have
>> not
>> > > lived there for four years. I am considering a 1031 exchange and
>> > obtaining
>> > > an equal or higher value new condo in another state and rent that out.
>> > This
>> > > way I will not have to worry about exterior maintence. I will rent
>that
>> > out
>> > > which will help to pay for my current mortgage. I do not work as I am
>> > > living off the rental income of the first home and my inheritance.
>Does
>> > > that sound like a good plan?

Just to add:

1. assuming you can sell the house and place funds in escrow
might not be enough. Hire an exchange accommodator (if you have
pickedout the new property) or Qualified Intermediary to handle
all moneys.

2. Any home you acquire in a 1031 exchange is not eligible for Sec
121 exclusion for 5 years.
--

__
Art Kamlet ArtKamlet @ AOL.com Columbus OH K2PZH

Re: 1031 exchange

Since I have not lived in the house for four years, I believe I could also
move back for one year, and claim the 250,000 personal capital gains
exemption by meeting the 24-month occupancy test. What was that called, the
section 121 exclusion rule?

"Arthur Kamlet" <> wrote in message
news:dirh24$mgm$
> In article <>
wrote:
> >There is no specific tax code regarding "intent". I've heard so-called
> >experts say anything from 6 months to 2 years of rental. It really
depends
> >on the IRS investigator who's doing your audit. I'm pretty sure that "2
> >weeks" would not convince anyone. There's no rush to sell your current
> >residence either, you can rent it out for 3 years and still get the 250k
> >exemption.
> >
> >
> >"Spin" <> wrote in message
> >news:
> >> Thanks. Regarding the 1031 exchange - I know I can sell the rental
house
> >> (which I own outright) and put the money into escrow and use the escrow
> >> funds to buy and equal or higher value house. Now this is what I don't
> >> know. I believe I have to show rental intent - by renting it out maybe
at
> >> least two weeks, then I can move into it, and sell the house I have a
> >> mortgage and keep the $250,000 exemption. It's the second part I am
not
> >> clear on the tax law.
> >>
> >> "Dan G" <> wrote in message
> >> news:
> >> > Yup.
> >> > Or, sell the house on a contract and collect lot's of interest for
5-10
> >> > years that will more than pay the capital gains tax when it finally
> >> closes.
> >> > On a $200,000 house, you'll collect nearly $70k interest in 5 years
at
> >7%.
> >> > Since you own it outright, you have several options. Maybe your
current
> >> > tenant would even be interested in a deal. Contracts vary a lot from
> >state
> >> > to state. You would still hold title, but would not be responsible
for
> >> > upkeep. Even if they default, you will have made more than enough to
pay
> >> for
> >> > the rehab needed to sell it again. Most of what you collect for the
5-10
> >> > years till it balloons will be interest. Taxable as regular income,
but
> >no
> >> > gains tax till it closes and you surrender title. Then, you can still
> >buy
> >> > the next one and do it all again. You can make decent money on
houses
> >> this
> >> > way even if you pay full retail for them.
> >> >
> >> > Work the numbers and see how it works out for you.
> >> >
> >> >
> >> > "Spin" <> wrote in message
> >> > news:
> >> > > Hello experts,
> >> > >
> >> > > I am a 58-year old widow who owns one home (currently renting that
> >one)
> >> > and
> >> > > has a substantial mortgage on another (which I'm living in). I
want
> >to
> >> > sell
> >> > > the first home (which I own outright) partly due to the fact I
cannot
> >> keep
> >> > > up on it's maintenance. I do not want to move back into it and I
have
> >> not
> >> > > lived there for four years. I am considering a 1031 exchange and
> >> > obtaining
> >> > > an equal or higher value new condo in another state and rent that
out.
> >> > This
> >> > > way I will not have to worry about exterior maintence. I will rent
> >that
> >> > out
> >> > > which will help to pay for my current mortgage. I do not work as I
am
> >> > > living off the rental income of the first home and my inheritance.
> >Does
> >> > > that sound like a good plan?
>
> Just to add:
>
> 1. assuming you can sell the house and place funds in escrow
> might not be enough. Hire an exchange accommodator (if you have
> pickedout the new property) or Qualified Intermediary to handle
> all moneys.
>
> 2. Any home you acquire in a 1031 exchange is not eligible for Sec
> 121 exclusion for 5 years.
> --
>
> __
> Art Kamlet ArtKamlet @ AOL.com Columbus OH K2PZH

Re: 1031 exchange

An aggregate of 24 months out of the past 60 months qualifies as personal
residence.



"Spin" <> wrote in message
news:
> Since I have not lived in the house for four years, I believe I could also
> move back for one year, and claim the 250,000 personal capital gains
> exemption by meeting the 24-month occupancy test. What was that called,
the
> section 121 exclusion rule?
>
> "Arthur Kamlet" <> wrote in message
> news:dirh24$mgm$
> > In article <>
> wrote:
> > >There is no specific tax code regarding "intent". I've heard so-called
> > >experts say anything from 6 months to 2 years of rental. It really
> depends
> > >on the IRS investigator who's doing your audit. I'm pretty sure that "2
> > >weeks" would not convince anyone. There's no rush to sell your current
> > >residence either, you can rent it out for 3 years and still get the
250k
> > >exemption.
> > >
> > >
> > >"Spin" <> wrote in message
> > >news:
> > >> Thanks. Regarding the 1031 exchange - I know I can sell the rental
> house
> > >> (which I own outright) and put the money into escrow and use the
escrow
> > >> funds to buy and equal or higher value house. Now this is what I
don't
> > >> know. I believe I have to show rental intent - by renting it out
maybe
> at
> > >> least two weeks, then I can move into it, and sell the house I have a
> > >> mortgage and keep the $250,000 exemption. It's the second part I am
> not
> > >> clear on the tax law.
> > >>
> > >> "Dan G" <> wrote in message
> > >> news:
> > >> > Yup.
> > >> > Or, sell the house on a contract and collect lot's of interest for
> 5-10
> > >> > years that will more than pay the capital gains tax when it finally
> > >> closes.
> > >> > On a $200,000 house, you'll collect nearly $70k interest in 5 years
> at
> > >7%.
> > >> > Since you own it outright, you have several options. Maybe your
> current
> > >> > tenant would even be interested in a deal. Contracts vary a lot
from
> > >state
> > >> > to state. You would still hold title, but would not be responsible
> for
> > >> > upkeep. Even if they default, you will have made more than enough
to
> pay
> > >> for
> > >> > the rehab needed to sell it again. Most of what you collect for the
> 5-10
> > >> > years till it balloons will be interest. Taxable as regular income,
> but
> > >no
> > >> > gains tax till it closes and you surrender title. Then, you can
still
> > >buy
> > >> > the next one and do it all again. You can make decent money on
> houses
> > >> this
> > >> > way even if you pay full retail for them.
> > >> >
> > >> > Work the numbers and see how it works out for you.
> > >> >
> > >> >
> > >> > "Spin" <> wrote in message
> > >> > news:
> > >> > > Hello experts,
> > >> > >
> > >> > > I am a 58-year old widow who owns one home (currently renting
that
> > >one)
> > >> > and
> > >> > > has a substantial mortgage on another (which I'm living in). I
> want
> > >to
> > >> > sell
> > >> > > the first home (which I own outright) partly due to the fact I
> cannot
> > >> keep
> > >> > > up on it's maintenance. I do not want to move back into it and I
> have
> > >> not
> > >> > > lived there for four years. I am considering a 1031 exchange and
> > >> > obtaining
> > >> > > an equal or higher value new condo in another state and rent that
> out.
> > >> > This
> > >> > > way I will not have to worry about exterior maintence. I will
rent
> > >that
> > >> > out
> > >> > > which will help to pay for my current mortgage. I do not work as
I
> am
> > >> > > living off the rental income of the first home and my
inheritance.
> > >Does
> > >> > > that sound like a good plan?
> >
> > Just to add:
> >
> > 1. assuming you can sell the house and place funds in escrow
> > might not be enough. Hire an exchange accommodator (if you have
> > pickedout the new property) or Qualified Intermediary to handle
> > all moneys.
> >
> > 2. Any home you acquire in a 1031 exchange is not eligible for Sec
> > 121 exclusion for 5 years.
> > --
> >
> > __
> > Art Kamlet ArtKamlet @ AOL.com Columbus OH K2PZH
>
>

Re: 1031 exchange

depending on the state property tax law, 1031 ex will bump up the tax
to current appraised value. In California, it could mean increase of
hundreds of dollars in monthly expense on the rental..