Updated about 2 years ago on .
Most recent reply
presented by
Change of Use of a 1031 Exchange Property
Hypothetical: Out-of-town owner has a 3-apartment rental house. Owner's in-town elderly parent requires care so owner moves into 1 of the units to care for the parent. Does this trigger a taxable event by violating the 1031 Exchange rules?
Most Popular Reply
- Qualified Intermediary for 1031 Exchanges
- St. Petersburg, FL
- 9,531
- Votes |
- 9,205
- Posts
@Joel Dicks, After a 1031 has occurred? Probably not. If it's been a year or so then it is perfectly fine to convert to primary. There is a safe harbor from the IRS at 2 years.
And the law says that it must have been their intent to hold that new property for investment use. As long as this represents a change in their intent and not revealing their intent all along there are a number of reasons why this could work.
If the moving van is backed up the the property with their stuff in it the day they close on it then that's a different story.
- Dave Foster
