House Hack Percentage

3 Replies

I'm setting up my first 1031 exchange on a duplex sale that I lived in part of. The house was two units but they are not equal size. I'd estimate that our unit was %65 of the house. Does it go by percent of square footage or number of units or some other calculation? How do I determine the percentage that has to go into the 1031?

Thank you,

Alan

I'm sorry I don't have a definitive answer but I'm sure some 1031 experts will jump in.  Are you assuming you'll take your primary residence deduction on the lived-in portion and 1031 the rental portion?  What are you exchanging for?  If you did like for like and moved into another multi, would the percentages even matter?  Interesting question. 

@Alan Berlin , It's really not even a 1031 question per se.  It's between you and your accountant.  There is no hard and fixed standard due to the bazillion different configurations and possibilities there could be with land, sq ft, common space, use, etc etc etc.  However it needs to be reasonable. Square footage is usually the easiest and most common.  However, your accountant should have already set it up when you placed the rental into service for purposes of depreciation and expense allocation.  That is the allocation ratio of primary to rental that you will use.  And only the rental portion need go into the 1031. 

@Alan Berlin , It's really not even a 1031 question per se.  It's between you and your accountant.  There is no hard and fixed standard due to the bazillion different configurations and possibilities there could be with land, sq ft, common space, use, etc etc etc.  However it needs to be reasonable. Your accountant should have already set it up when you placed the rental into service.  That  

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