1031 exchange


J

Jenny

This might be a stupid question. if so, sorry..

If I sell a rental house and buy a business (retail), would
this transaction be qualified as 1031 exchange?

thanks
 
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H

Herb Smith

Jenny said:
This might be a stupid question. if so, sorry..

If I sell a rental house and buy a business (retail), would
this transaction be qualified as 1031 exchange?
Are you buying the building that the business is housed in,
or just the assets of the business?
 
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L

L K Williams

Jenny said:
This might be a stupid question. if so, sorry..

If I sell a rental house and buy a business (retail), would
this transaction be qualified as 1031 exchange?
The short answer is "NO." A 1030 exchange is also known as
a "like-kind" exchange. While IRS has ruled that real
estate can be exchanged for real estate, regardless of use
(other than a personal residence), personal property must be
truly of a like nature. You cannot exchange real estate for
personal property under these rules.

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans
 
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M

m.purves

Jenny said:
This might be a stupid question. if so, sorry..

If I sell a rental house and buy a business (retail), would
this transaction be qualified as 1031 exchange?
for all I know there's more to a 1031 exchange than selling
and buying. You can't declare a transaction like that a 1031
exchange after the fact, it needs to be set up correctly. If
I were you I'd first read up on it and then consult with a
real estate attorney or at least an escrow company. If you
have already done eithe the buying or the selling it's
probably too late.

Maren
Palms, Etc.: Tropical Plant Seeds - Hand-made Jewelry -
Plants & Lilikoi
http://www.jach.hawaii.edu/~maren/palms_etc/
(never done a 1031 exchange, but thought about it at times)
 
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W

Wayne Rivers

Jenny said:
This might be a stupid question. if so, sorry..

If I sell a rental house and buy a business (retail), would
this transaction be qualified as 1031 exchange?
No questions are "stupid", especially on 1031 exchanges.

This would not qualify as a 1031 exchange since you are not
exchanging like-kind property.

Wayne Rivers, CPA
 
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1031 Exchange Like Kind Requires Real Estate for Real Estate

You are selling real estate, so you must exchange into other real estate that is also held as rental, investment or business use property.

You could do a 1031 exchange if you were selling a restaurant and buying another restaurant. However the 1031 exchange would mean exchanging a stove for another stove and a refrigerator for another refrigerator, etc.
 
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