1031s

Practical and Practice issues for Professionals who practice in the area of taxation. Moral, social and economic issues relating to taxes, including international issues, the U.S. Internal Revenue Code, state tax issues, etc. Not for "tax protestor" issues, which should be posted in the "tax protestor" forum above. The advice or opinion given herein should not be relied on for any purpose whatsoever. Also examines cookie-cutter deals that have no economic substance but exist only to generate losses, as marketed by everybody from solo practitioner tax lawyers to the major accounting firms.
Tax Man

Re: 1031s

Post by Tax Man »

fuzzrabbit wrote:My property to be sold qualifies. My question is about sale of my primary residence AFTER I do the 1031 on the OTHER property. I don't think the rules allow an immediate moving in to the new property which was exchanged from a second home/business property. If my new address of record is immediately the property which I just bought with a 1031 exchange won't I be liable for Capital Gains Taxes? It would have immediately become my primary residence.
What did your CPA say when you asked?
Arthur Rubin
Tupa-O-Quatloosia
Posts: 1756
Joined: Thu May 29, 2003 11:02 pm
Location: Brea, CA

Re: 1031s

Post by Arthur Rubin »

Without checking the regulations and other interpretations, 1031(h)(2)(B)(ii) strongly suggests that the acquired property would be considered personal-use property, at least for the purpose of this section, so gain on the relinquished property would not be deferred.
Arthur Rubin, unemployed tax preparer and aerospace engineer
ImageJoin the Blue Ribbon Online Free Speech Campaign!

Butterflies are free. T-shirts are $19.95 $24.95 $29.95
Arthur Rubin
Tupa-O-Quatloosia
Posts: 1756
Joined: Thu May 29, 2003 11:02 pm
Location: Brea, CA

Re: 1031s

Post by Arthur Rubin »

fuzzrabbit wrote:
Arthur Rubin wrote:Without checking the regulations and other interpretations, 1031(h)(2)(B)(ii) strongly suggests that the acquired property would be considered personal-use property, at least for the purpose of this section, so gain on the relinquished property would not be deferred.
My tax guy is on vacation. If I read that correctly, after I rent out the newly acquired business property for two years and then move in, I'm cool so far as gains taxes on the original business property?
More or less, although if they (the IRS) see an intent to move in after two years (remember, this is an open forum, and IRS agents are not prohibited, or even discouraged, from reading it), that might make the property personal-use property (voiding the 1031 exchange) even if it does have apparent business use during those two years.
Arthur Rubin, unemployed tax preparer and aerospace engineer
ImageJoin the Blue Ribbon Online Free Speech Campaign!

Butterflies are free. T-shirts are $19.95 $24.95 $29.95