1031 exchange question and recommendations for Qualified Intermediaries

[Lambertus Louw]

I have a 4-family rental and a single family home (that we live in) with an in-law suite that we rent out in Massachusetts. Looking to sell up and move South. I shouldn't have profits hight enough on my single family home to worry about capital gains (less than $500k for a married couple, right), but the rental is obviously an issue. 

Plus there's complications. We have to move out of our single-family house before I can reasonably expect to clean it up and sell it, my wife breeds cats and dogs and that doesn't make for a great environment for selling. So I was hoping to sell my 4 family rental first, and buy a house with a rentable in-law suite/separate apartment in it's place using a 1031 exchange (and then later, sell my single family and put that money to further investment)

I understand vaguely that I would need to find a "like kind" property within 45 days. How "like kind" does it have to be? Can I buy a single-family home with an in-law suite as a replacement? Would it be a deal breaker if I lived in the house and only rented out the in-law suite?

Finally, the topic of my post. Can anyone refer me to a Qualified Intermediary they have worked with before and would recommend?

[Dave Foster]

Thanks for that shout out @Caleb Brown and @Alex Olson.  @Lambertus Louw, I shot a response to your pm to me.  Looking forward to speaking.

For the benefit of the forum - Here's the take on Like-kind and what it means:  The IRS has two qualifications that must be met for a property to be eligible for a 1031 exchange.

1. It must be "like kind".  This simply means that it is real estate.  Any type of real estate is like kind to all other types of real estate.  It doesn't matter what type of real estate you buy or sell in a 1031.  It simply must be real estate (and yes, there are some funky things that qualify as real estate like oil interests, deeded boat slips, certain time shares)

2. The property must be used for "qualified use".  This means that is held for productive use in trade, business, or for investment.  That's the legal definition.  The practical interpretation is you must own the property with the intent of holding it.  So fix n flips where your intent is primarily to sell, or a property you mean to purchase to immediately be your primary residence would not be qualified use.  

Property that qualifies for a 1031 any type of real estate as long as you own it with the intent of holding it for productive use.