1031 turning into a primary residence
Hi there,
I currently own a 1 bedroom condo in the bay area and i am renting it out. The condo is worth about 820k and i want to sell it to buy a single family house about 20 miles away. I paid 560k for the condo in 2016 and only owe about 345k on it. My goal here is to do a 1031 exchange and claim the single family house as a rental property but i want to live in it in the future. What would be the best strategy to take? I obviously don"t want to paid capital gains on the home but i want to do everything legally. I have heard of people putting a home into a LLC and paying the LLC rent, is that possible in this situation and is it also legal to do?
Thanks for the help
Most Popular Reply
if you are going to rent out the home for I think 2 years but it may be a different number with new tax law you would be ok. You can then turn it into a primary residence after the mandated rental period.