1031 exchange, am I too late
I typically buy and hold, but in February this year, I bought a super run down property, and turned it around. When I looked at the numbers - total all in cost & rental income VS. just selling it outright, it made way more sense to just sell. So I listed on August 15, and sold on September 15. Here are the numbers:
Purchase price - 130K
Reno cost - 100K
Sale price - 325K
Gross Profit - 95K
Net Profit - 70K
The net profit (70K) is after paying agents, fees and all others. I intend to definitely buy two more properties with the proceeds from this deal. Before doing that, I am looking at a huge tax bill. From preliminary research, my worst case scenario is - Fed 35%, and 10% to DC - that's a giant 45% gone. Question, can I still do a 1031 exchange ? If I go ahead and just buy the two houses and use up all the proceeds, will I still have to pay taxes to the government?
Thank you so much!!