Updated about 8 years ago on . Most recent reply
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I have a condo that I own free and clear. I am buying a new primary residence. I got a home equity line of credit to make the down payment. Anyways I was initially planning on selling it and using that money to found a deal. Only because I can't rent (HOA). However now I am considering selling it on seller financing not lease option. Thought on which way I should go. Ps: I know I need to pay of the equity line before selling in either case. Thanks
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Dave Foster
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@Anthony Angotti, The portion you hold for investment would qualify for 1031 treatment. The portion you live in would fall under the primary residence rules of sec 121. When/if you sell, as long as you qualify on both fronts, you will be able to take a portion of the profit tax free and use the remaining in a 1031 to purchase more investment real estate.
Your accountant will have set up a depreciation table on the investment portion and have allocated the % of the whole that is used as investment.
Great strategy!
- Dave Foster
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