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Can
I sell two properties, and then
only buy one new property to complete
my 1031 exchange?
Yes,
you can. In fact, this is a good
strategy for reducing your management
hassles by consolidating your
investments. This may also make
sense if you want to sell a few
smaller properties in order to
finance one more expensive property.
Likewise,
you can sell one property and
buy multiple new properties. This
strategy is good for diversifying
your investment risk either geographically
or by property type. For example,
you can sell your old property,
and then buy 3 separate properties
-- a rental house in Florida,
bare land in Colorado and a commercial
condo in New York. Diversification
can also improve your leverage
and cash flow potential.
--The Experts
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| I
read something
in Tee-Shots
that I have
a question about:
you said I can
sell two properties
and buy one,
but what if
the properties
I'm selling
are in two different
entity names?
I know that
if I'm using
two different
entities, whichever
entity sells
is the one that
has to purchase
the new property
(one is owned
personally and
the other is
owned in a corporate
name). Can I
still just buy
one property
with the money?
Thanks for your
reply,
Keren. |
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Great Question!
The
trick
is that
you are
really
completing
two exchanges,
by two
separate
taxpayers
(you and
your corporation).
What this
means
is that
you have
to acquire
the new
property
in two
pieces,
one piece
for each
taxpayer.
You and
your corporation
each receive
title
to a percentage
of the
new property
corresponding
to the
value
of property
sold by
each.
It's
also important
to remember
that each
sale has
its own
time deadlines,
investment
requirements,
etc.,
so you
should
work closely
with your
qualified
intermediary
to ensure
that all
the pieces
of the
exchange
can be
properly
structured.
Call
us
if
you
have
anymore
questions
about
this
at
866-694-0204,
or
email
us
at
.
Thanks!
--The
Experts |
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TEE-Shots
are Tips
from the Exchange
Experts
that are designed to make you think about, and ask questions about, the 1031 exchange process.
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