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Updated about 4 years ago on . Most recent reply

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Carlos Silva
  • Argyle, TX
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57
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Can you 1031 exchange residential for commercial ?

Carlos Silva
  • Argyle, TX
Posted

I have a single family rental home I would like to sell.  I would like to use the proceeds as a down payment for commercial real estate (raw land).  Can I do this through a 1031 exchange?

Most Popular Reply

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9,116
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Dave Foster
  • Qualified Intermediary for 1031 Exchanges
  • St. Petersburg, FL
9,451
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9,116
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Dave Foster
  • Qualified Intermediary for 1031 Exchanges
  • St. Petersburg, FL
Replied

@Carlos Silva The rules are very broad.  Any type of investment real estate to any other type of real estate is fine for the 1031.  As a matter of fact you're in the Oil industry and would appreciate this - Working and royalty interests also count as like kind for regular investment real estate.  So you can 1031 exchange a duplex for a royalty or working interest in an oil or gas well.  

The one thing you'll want to be ready for is that the 1031 into land will halt the depreciation of any further basis.  So you will lose that benefit until you later add structure to the land.  

  • Dave Foster
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The 1031 Investor
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103 Reviews

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