1031 Swapping mixed use property
Hi,
I inherited a 1 family home, where I had been living for more than 10 years, I did not pay rent prior to inheriting, continued to live in after inheriting, no interruption.
Got the deed 1.5 years ago after probate procedures , but inherited it 3years ago as a matter of state law the title of the property passes on to the heir upon the descendent’s death.
For the last two years it has been owner occupied rental 50% of the property several rooms, it is a small mansion.
Question
Planning to swap (actual barter) it for a lower value property, It seems It qualifies for a prorated 1031 (?)
If not considering a 1031, there is a small capital gain, already taking into consideration $250k (single tax payer) if I prorate the 1031 portion, does it mean that the capital gain will be higher if I prorate the rental portion?
Property when inherited appraised at $ 1 million
Improvements $ 100k
Market value now $1.7
Single exemption capital gain $250k
Capital gain: $$350k
Property that will be acquired $600k (swap) +$1.1 million cash