Posted by Jimbob on May 23, 1999 at 14:29:38:
Norm,
The home you will be exchanging into will have had to be a rental for at least two out of the last five years to qualify. Nice try though!
Jimbob
1031 exchang by converting home to rental? - Posted by Norm Dorpat
Posted by Norm Dorpat on May 23, 1999 at 10:27:26:
Is it possible to qualify for a 1031 exchange by selling an existing single family home rental and exchangeing for a new rental that is created by converting my personal home into a rental?
No exchange here - Posted by Dave T
Posted by Dave T on May 23, 1999 at 22:36:22:
The rules for 1031 say that you have to identify your replacement property within 45 days after the sale of your investment property, and complete the purchase withhin 180 days after the sale of your investment property.
The replacement property can not be bought before the sale of the investment property. Since converting your primary residence to an investment rental does not involve a “purchase”, (IMHO) this transaction does not qualify for a 1031 exchange.
Another point, since your primary residence already qualifies for exclusion of capital gains, why would you want to convert it to a rental and then only DEFER future capital gains? Remember, 1031 exchanges only postpone the date when the capital gains taxes have to be paid.