1031 starker exchange

[DuckNCCottage]

What is the name of your state? North Carolina. My wife and I own a renta; house in North Carolina. We purchased the unit eight years ago for 185,000. It is now worth 700K. We are contemplating a Starker exchange for property in Arizona. Assuming we can sell for 700K, how much must we put into a new property. Can we exclude from the new property the down payment we made on the NC house, the entire purchase price?

Also, should we decide to live in the beach house (as our principal residence)for two years and then sell, how do we handle the amount we've depreciated?

 

[abezon]

1. To exclude gains in a 1031 exchange, you must put all the proceeds into the new place. You should also hire a professional 1031 exchange facilitator. Do not attempt it on your own.

2. New Tax Law: If you acquire a house in a 1031 exchange, you must own it for at least 5 years before you can sell & be eligible to exclude any gains. Also, under the 1031 rules, you'll need to keep the new house as a rental for at least 2 years before converting it to personal use.

3. You'll need to recapture any depreciation claimed on either house after 5/1997. If you know you're going to live in the AZ house, you could not depreciate it and rely on sec 1250(b)(3) -- you'd only have to recapture the depreciation actually claimed on the houses since 5/1997.

 

[slemerson]

Wa State 1031

Just found this thread after posting in another section..
When was this new tax law enacted re:two years before converting to personal use?
We closed 12/17/04. We were expecting to rent it for 14-15 months before it was converted to an owner occupied property.
Thanks,
Steve

 

[Snipes5]

The latest laws for '04 went into effect on 10/22/04, so your 12/17 date is well after anything would have changed.

Snipes