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Feb
28
dummy asked:
I bought a rental property lthrough 1031 exchange last year in another town, but now want to move there to live. What are the tax implications? Will I have to pay the deferred capital gains taxes?
Bruce
I bought a rental property lthrough 1031 exchange last year in another town, but now want to move there to live. What are the tax implications? Will I have to pay the deferred capital gains taxes?
Bruce
Comments
spicertax on 2 March, 2009 at 10:22 pm #
No tax due when you move in. But you will not get the 250,000/500,000 capital gain exemption when you sell it unless you live there for 5 years. This is longer than the normal 2 year rule for getting a home sale exemption from gains.
El_Nimo on 3 March, 2009 at 4:15 am #
You should consult a CPA or tax attorney on this. Even if you live in it you will not be able to sell the property tax free.
Why? You were able to take a depreciation on your old property and then received a gain on it when you 1031 exchanged it. A 1031 only defers taxes not avoid it.
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