1031 Real Estate question

[cbo111]

What is the name of your state? CA
I am selling a lot in Florida and buying a home in Calif. I have owned the lot for a little over two years and should have a gain of apprx $200,000. Can I buy a home in Calif to avoid capital gains? If so, does it have to be a rental property?
thanks

[tdavidl]

you cannot use code sec 1031 for personal use property. you could use sec 1031 for business land in exchange for business rental prop as both are considered r/e & is considered "like-kind".

you could convert the business rental property to personal use property sometime down the road, however, if it's converted to personal use in a short time frame from the exchange the IRS could negate the 1031 exchange.

[denswife]

ca
I think that I may have the same circumstances...please help me clairfy.
I have acreage (not developed) and expect to have a capital gain of 250,000.00 how does the IRS consider a land to be a business property verses personal property?
I would like to use the gain to purchase rental property in another state. Could I also benefit from code sec 1031?

[tdavidl]

go to the irs website [url]http://www.irs.gov/[/url] and look at pub 544, under tax-free exchanges....

personal use property is not eligible for 1031, other types of property are eligible (business use, investment use, etc). they even give an example on unimproved land for improved land. so if your land is for investment purposes then it should qualify.