Subject:  Tax-Deferred Section 1031
Date:  Fri, 31 May 2002
From:  Bill

Dear Michael:

I have some rental property that I am planning to sell and I am also buying a new home.

Am I allowed to use my new house, which I plan to use as amy primary residence, as my "upleg"?

Please advise.

Bill

Answer

Date:  Mon, 3 Jun 2002

Hello Bill,

On property held for productive use in a trade or business or for investment qualifies for exchange treatment. To be "like kind" the property received must also meet this requirement. A principal residence is considered a personal-use asset and doesn’t qualify.

Good luck!
Mike Gray

We have more answers to frequently asked real estate tax questions! We also offer up-to-date information about new tax real estate tax developments in Michael Gray, CPA's Real Estate Tax Letter.

Subscribe to Michael Gray, CPA's Tax & Business Insight Name: Email: We respect your email privacy Powered by AWeber Email Marketing