What must I charge for rent to make a 1031 exchange?

September 13, 2006

From:  Linda
Date:  Sat, 17 Jun 2006

If I make a 1031 exchange and buy a condo that I rent to my son, what is the amount of rent I must charge?


Date:  Fri, 07 Jul 2006

Hello Linda,

The rent has to be at fair market value based on similar properties in your area. The real estate agent who is helping you with the transaction may be able to help you compile information supporting the amount you charge. Make a written lease. (Why are you creating additional risk for a tax-sensitive transaction?)

Good luck!
Mike Gray

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