1031 exchange for tax defaulted properties in CA ? - Posted by JKCDN

Posted by David Krulac on March 06, 2001 at 14:47:48:

it might work. make sure you follow all the regs exactly including the 45 day identification and the 180 day (NOT 6 month) closing. the rental must be bona fide, market rent etc and I wouldn’t convert it real soon, 2 years might be good see a qualified tax advisor.

1031 exchange for tax defaulted properties in CA ? - Posted by JKCDN

Posted by JKCDN on March 02, 2001 at 14:44:32:

I can’t seem to find a definitive answer to this question:

If I buy a tax defaulted properties at auction and sell it at a later date, can I put the proceeds in a 1031 exchange to escape capital gains tax?

I just finished reading John Beck’s quide to tax defaulted property in California and this question is not adressed.

Thanks everyone, this is my first post and I wanted to let everyone know what a great resource this board is !!

Re: 1031 exchange - Posted by JPiper

Posted by JPiper on March 03, 2001 at 01:44:57:

I think the answer to this is “It depends”. It depends on what your intent for the property is, and what you do with it. The 1031 provisions require that the property be held as an investment. So if you buy and then resell, this would not fit that definition.

On the other hand, if you acquire the property, rent it out for a period of time (let’s say a year or two), then sell, you could do the 1031.


Re: 1031 exchange - Posted by David Krulac

Posted by David Krulac on March 03, 2001 at 09:23:38:

if the property exchanging into is a tax sale property there could be adverse effects from the tax sale. If the period of redemption is longer than the 180 days for the 1031, you could lose the property and have no means of recovery since the 180 days has elapsed. Also a Quiet Title Action often takes longer than 180 days which could also blow you out of the 1031 water.
David Krulac

trade rental for residence deduction - Posted by leslie

Posted by leslie on March 04, 2001 at 23:42:06:

recently i was thinking about that 1031. can it be combined with the personal residence rule?
i might trade a handfull of rentals for nicer digs.
after renting it i then move in for a couple of years before selling.

if this works i guess it is not a new idea.
the personal residence allowance for profits
on sale seems too good to be true.

any thoughts ?