house hack rental 1031 exchange

3 Replies

Hello, newbie question here.. If we rented out our basement and lived in the main  living area ourselves, can that house qualify  for a 1031 exchange when we sell it

Not the percentage/pro rats share you live in......but you’d get the section 121 exclusion for that, living there at least 2 years.

Interested about learning more about this strategy. Currently renting out 3 bedrooms out of the 4 in my primary residence. Looking to expand by the end of the year in the Ventura, Los Angeles, Orange, and San Diego county areas.

@Nilofer Sickander @Kevin Phu will either of you be making more than 250,000 (500,000 if you owned with your significant other) profit when you sell your personal residence? If not why do you want to 1031 exchange the property?

If yes, are the people you are renting your place have a signed lease? How are they paying you? Either way, I would partner with an accountant and see how to structure it so if you are making more than 250,000 profit as a single filer, that you could put the remaining profit into your next investment. 

Kevin, I can partner you with someone if you want because I know he knows CA RE taxes exceptionally well. 

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