My wife is getting about $550k from the sale of a family farm. Would prefer to not pay capital gains and do a 1031. Looking for either a vacation rental or adding another long term rental property. We live in Elkins, WV and would prefer to be within an hour or so of it. Thoughts?
Snowshoe!!!! That's what I would do in a heartbeat. I've seen some pretty incredible ROI for vacation rental type properties there. Massanutten is another good option but that's a 2 hour drive. Good luck.
@Daniel Engstrom something to check on… Is the farm being sold commercial or residential? If it’s residential, it may be tough to 1031, seeing as residential does not qualify. I would check in on that with someone a whole lot smarter than me. LOL￼
@Daniel Engstrom Provided that the farm property is eligible for a 1031 exchange, you may want to consider purchasing a property that is considerably higher priced (at least $200k) so you can take advantage of the latest tax regulations which allow 100% bonus depreciation with cost segregation. This will not only avoid the capital gains taxes but also increase your cash-flow the first year by 6-10% of the difference between the $550k and the new property. It will reduce your federal and state taxes even further.
@Daniel Engstrom , that property will qualify for a 1031. @Timothy Doenges , Any type of investment property can be exchanged for any other kind. Residential does qualify for a 1031 as long as it is residential used for investment. So the farm will not be an issue.
Daniel it's a joke with a hint of truth. but I tell everyone that no one should own a vacation or 2nd home. Everyone should own investment properties that use some for personal use. If you have that mindset then you'll treat the property that way. And that qualifies it for 1031 treatment.
So look away into your favorite vacation spots for your investment vacation rental!!!