If i do a 1031 exchange, how do I have to wait to pull out my money through a home equity loan? Are there other possibilities that I should be looking into?
Thanks in advance.
@Scott DeFries , Once you complete your exchange you can indebt it as you will. At that point you are simply accessing equity through a debt instrument which is not a taxable event.
@Dave Foster as far as doing that refinancing AFTER the exchange.......... IF a person is going to transfer the property from individual name to an LLC, do you see any pros or cons from the 1031 Exchange standpoint? Obviously we would need to talk to lender too, but is seems like the Exchange is done at that point and there would be no difference, correct?
Thanks, Dan Dietz
@Daniel Dietz , The IRS does not like changes of entity immediately prior to an exchange. Once the exchange is complete there's really no 1031 issue with contributing it into a different entity as long as done properly so no gain is triggered.
The only potential issues would be down the road. If the property is put into what becomes a regarded entity then for the next sale that entity has to be the exchanger meaning it has to sell and buy the next property. If the entity has not been seasoned or has not performed adequately then lending might be an issue to the entity. And that can jam up a 1031 very quickly. the entity has to take title but the bank wont lend to the entity.