I'm not sure if this is the correct area for this, but I am definitely just "starting out", so here goes...
I want to sell my house and buy my first multi. Using a 1031, do I have to actually spend all the money I get from sale? I would like to us my home equity for a down payment, cash reserves, and maybe the start of my next down payment, but idk if this will hurt me come tax time. Thank you!
Yes you have to spend it all and if this home is your primary residence, you can not do a 1031 exchange.
Is it/has it been your primary residence?
How long have you owned And lived in it?
How much Gain would you to have when you sell?
How much Cash will you get after mtg pay off and closing costs/commissions?
@Tyler Rodgers , a 1031 starts with the sale of a piece of investment property. If the house you are referencing selling is your primary residence you cannot do a 1031 to buy the multi. and you probably don't want to in that situation anyway. If you've lived in that property for 2 out of the last 5 years then the first $250K ($500K if married) of profit is tax free. So sell your house and take the money tax free and buy a multi if you want.
1031 is only for property that you have purchased with the intent of holding for productive use in business trade or for investment.
@wayne Brooks this is my primary residence. I've lived in it 3 years. I expect to end up with about $50k minus selling costs. About 8k loan paydown and about 40ish in appreciation.
@samantha Klein and @dave foster thank you for clarifying the 1031 thing for me. This is all new to me.
Yes it all has to be re invested in your next property.
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