1031 Exchange Scenarios, need some advice
Hi everyone,
I have a SFH (it's been rented out for about 7 years) and I want to 1031 exchange it in the semi near future. I have a few questions and wanted some insight into the implications of a few scenarios I'm considering and would love some feedback and advice if any of these are viable, pros/cons. Thanks in advance!
Property: SFH, been rented out for last 7 years (used to be my primary residence).
purchased: 400k, plan on selling for $800k, 20% down at purchase time + 100k rehab done.
Question #1: If I sell for $800k ,minus closing costs/real estate fees, does my 1031 property I find have to be of equal or more value? Can I take out my original downpayment in doing the 1031 exchange?
Scenario #1:
Sell SFH, buy 2 properties:
property 1: small multi-family unit
property 2: SFH
3 years down the road I decide I want to move into that property #2 the SFH. Can I do this?
If I can and then sell it 4 years later, can I get the capital gains exemption when I sell it? If so how does that work? Is it pro-rated for the time I resided in the home?
Scenario #2:
Sell SFH, purchase 10 smaller properties
If I sell these 10 smaller properties at some given time separately in the future, do I only pay the deferred taxes on that portion of the 1031 that was allocated for each home? Example, I decide to sell only 1 of the 10 properties that were purchased for the 1031 exchange and I decide to pay taxes on it. Assuming that each property is equality valued at the time of purchase do I pay taxes on 10% of that tax deferral on sell of my SFH?
I need to offload this property in the future but I'm just not sure what my strategy and plan is going to be so any useful advice is much appreciated. Thank you everyone!