I just currently sold a duplex I own and will be getting about $31,000 net from the sale.
Could I 1031 that into building a triplex that I will live in? Any help would be appreciated.
not if you already sold it, you need funds to go through a QI...
@Joshua Loera , if you meant that you just went into contract but have not closed yet then yes you can use that for new construction. The timelines will have to be met for you to take title of the replacement real estate. And the reinvestment targets will have to be met as well.
What you cannot do is to use a 1031 to buy the land and then build on it to finish up your 1031. For that type of process you will need to do a reverse or construction exchange.
@Dave Foster so the fact that he will owner occupy one unit is not a problem?
@Teri S. , Great question and the answer is yes. As long as the value of the portion used as rental (2/3rds of the triplex) is equal to or great than the value of the investment property he sold he would defer all tax on his sale. Great opportunity isn't it!
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