1031 to Primary Soon to be Rental

Member since 2019 · 4 posts · 3 votes

Hi everyone. I have a rental house that I've owned for just over a year. I have to sell it for personal reasons. I also have a primary residence that I'm going to turn into a rental and buy a new primary residence. Can I use the 1031 to recast the mortgage on my current primary but soon to be rental? Any other strategies for using 1031 money in this situation or is it only for purchase of a new rental property?

Thanks in advance

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Dave FosterBusiness Member
Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
2y
@Daniel Dollar unfortunately you can't 1031 into property you already own. You must purchase new investment real estate. If you've got enough runway you could do a 1031 exchange into a nice investment property. And then after a year or two move into it as your new primary. That would not be a taxable event. But it takes a couple of years to accomplish.
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Jackson Hanssen
Member since 2024 · 39 posts · 36 votes
1y
Agreed with Dave, you'll need to buy something new. Perhaps you could 1031 into a house you would want to be your primary in a couple years and stay in your current primary for a little bit.
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