I'm a little confused with the 1031. Can you split the proceeds from a SF home sale into 2 down payments on properties of equal or greater value? Or is it limited to a SF for a SF.
you can use the proceeds to purchase two different properties and to secure the full 1031 Exchange Benefits, you need to ensure the combined value of both properties is equal to or greater than the relinquished property, less reasonable closing costs, which does not include the payoff of a mortgage. I hope that helps
Awesome, thank you! The two properties can equal up to 200% of the original homes value, correct?
I am not familiar with that requirement as the replacement property does not have a ceiling on it. It sounds like you might be referring too one of the three available replacement property identification rules which allows you to identify any number of properties as long as the combined value of the identified properties does not exceed 200%. Make a little more sense.
@Chase Shank , Like kind is determined by use not type so you can go from SF to MF or commercial, industrial, agricultural and back vice versa. And those down payments do not have to be equally divided. All that matters is that if you want to defer all tax you purchase at least as much as you sell and use all of the proceeds in the next purchase or purchases. Any amount you buy down will not affect the integrity of your 1031 but you will pay tax on the difference.
I think @Robert Hetsler , nailed in on the 200% rule. Strangely enough that only deals with your identification list not what you end up purchasing. But you do have to purchase one or more of the properties on your list so that criteria is pretty important.
One last thing. Can I purchase property in different state? i.e. sell in VA and buy in ID
yes you can and @Dave Foster can handle them, like me, in all states.
Sweet! Thank you both for your input!