Re: 1031 Time Requirment Question - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on September 25, 2003 at 16:14:23:
If you lived in the townhouse for 24 or more months in the past 60 months, probably there will be no federal capital gains tax on most of the sale price. That is the sale of a personal residence, whereby up to $250K per person of capital gain is tax-free.
The part that you were renting out probsbly would qualify for a 1031 exchange. You would divide up the sale of the property into the two components, your house and the income property and treat each part appropriately for tax purposes.
However, I suspect that the amount of tax you would save by doing this would not be enough to make it an appropriate post. The cost of an exchange can be virtually nothing if you set things up right. However, most people use the professional accomodators and that might cost you $600-1000. Unless you can save that much money in capital gains taxes, it is probably not worth doing an exchange.
If you want to know more about exchanging, I recommend John T. Reed’s books on taxes and on exchanging, available at his www.johntreed.com website.
Good Investing*Ron Starr