1031 Tax Deferred Exchange

QUESTION:
Can inherited property, such as a home that was once a
primary residence, be used in a 1031 transaction?
And, if so, should the property have remained vacant,
or produced income (rental) following inheritance?

ANSWER:
A 1031 Tax deferred exchange is a transaction that allows a party the ability to reinvest their capital gain in a "Like Kind" property within certain time limits and rules without creating a taxable event. (read: really cool tax law)

A CPA and a licensed 1031 facilitators are good team members with your Realtor to see if this type of option is a good one for you.

Some basic rules of a 1031 include the need to identify up to 3 potential destination properties within 45 days of closing your initial sale transaction and an the absolute of having all purchase transactions closed within 180 days of closing the transaction.

It is also required that the acquisition price of the exchange property or properties exceed the sale price of the property that is being exchanged.

The 1031 exchange must be disclosed in writing within the connecting transactions.

In an exchange all money must flow through a licensed exchange facilitator.

Eugene's Alternative is versed in the ways of the 1031. We would be happy to consult with you further to see if this a good option to utilize in realizing your real estate goals.

Dave