Re: Reverse 1031 Exchange - Can I do this? - Posted by Frank Chin
Posted by Frank Chin on April 14, 2006 at 12:03:57:
I agree with the others, namely, speak to a 1031 facilitator. I was going to do something similar, and spoke to a number of them, though the transaction was not completed.
One thing that has to happen is the house you’re buying be deeded to the “facilitator” in the meantime, which would then have to held in in an “entity”, such as a C Corp. Some facilitators I’m told open an entity just to do the one transaction, which is better, while other facilitators may use one entity to do many, and they can do it cheaper. Ask how they plan to HOLD TITLE.
This one requirement may disqualify the property that you closed on, since its over and done with, and not deeded to a facilitator as required, but shouldn’t prevent you from doing it for the one upcoming. But if you plan to do it, you should notify the buyer that a facilitator will be involved and have the appropriate paperwork done. Make sure the time limits are observed for identification, and closing.
I also agree with the others that the Federal Capital gains are the lowest in years, but you’ll have to factor in State gains and recapture.