Chris MasonPro Member
Moderator
Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
10y
You can stack a 1031 on top of a 121 if you time it right. Go to a seminar if you wish, but basically live in it for 2 years, rent it for 2 years, boom you have a 1 year window, according to what some (long winded, compared to me) tax people have told me.
1 Reply
Cesar Ramirez
OP
Riverside, CA · Member since 2016 · 88 posts · 3 votes
10y
I've owned the house for 6 years and lived in it for one the rest of the time it's been rented
0 Reply
Cesar Ramirez
OP
Riverside, CA · Member since 2016 · 88 posts · 3 votes
10y
Chris Mason
0 Reply
Cesar Ramirez
OP
Riverside, CA · Member since 2016 · 88 posts · 3 votes
10y
Any other way any kind of ira that might work
0 Reply
Alice K.
Investor · San Francisco, CA · Member since 2015 · 306 posts · 211 votes
10y
One idea (check with a licensed CPA for all these as I'm not one but this might help you at least get started)-- Move into it, live there 2 years then you can sell and buy another property as your primary. That should offset the cash profit on the table. If it's investment property you could up the cost basis by improvements but that takes money.
0 Reply
Rosston Smith
Investor · Warner Robins, GA · Member since 2015 · 1k+ posts · 490 votes
10y
I recommend 1031 121.

"Section 121 of the Internal Revenue Code allows the exclusion of a realized capital gain of up to $250,000($500,000, if married filing jointly) from income if it is the sale of the taxpayer's principal residence."
0 Reply
Cesar Ramirez
OP
Riverside, CA · Member since 2016 · 88 posts · 3 votes
10y
It's not my primary residence it was at one point but I ended up renting the property for the last 5 years. Rosston Smith
0 Reply
Cesar Ramirez
OP
Riverside, CA · Member since 2016 · 88 posts · 3 votes
10y
And I only lived there for 1 year
0 Reply
Lydia S.
Real Estate Agent · Albuquerque, NM · Member since 2015 · 542 posts · 193 votes
10y
So, defer the tax with the 1031 or move in again until you've lived there for 2 of the last 5 years and sell as a primary residence. What other plans do you have that impact those options?
0 Reply
Sam Newell
Real Estate Agent · Lehi, UT · Member since 2016 · 136 posts · 91 votes
10y
Your only other option is a charitable remainder trust but that's more for older people who are done investing in real estate.
0 Reply
Cesar Ramirez
OP
Riverside, CA · Member since 2016 · 88 posts · 3 votes
10y
So with the 1031 exchange can I invest that into multiple properties. Or can it only be one property of higher value ?
0 Reply
Cesar Ramirez
OP
Riverside, CA · Member since 2016 · 88 posts · 3 votes
10y
Well Lydia S. I have a primary residence that me and my family live in. We have a new born. And at the moment that would not be an option. That house that I'm trying to sell is under an fha is that makes a difference ?
0 Reply
Bill ExeterBusiness Member
1031 Exchange Qualified Intermediary · San Diego, CA · Member since 2008 · 1k+ posts · 1k+ votes
10y
Originally posted by @Cesar Ramirez:

So with the 1031 exchange can I invest that into multiple properties. Or can it only be one property of higher value ?
Hi Cesar,
Yes, you can invest in multiple properties. The 1031 Exchange is a great tool to help you diversify, consolidate or reposition your investment real estate portfolio. The more properties involved the more tricky and complicated the identification of replacement property can become, so you need to understand the identification rules before you get close to selling your property so that you will be prepared for your 1031 Exchange and ready to act.
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0 Reply
Cesar Ramirez
OP
Riverside, CA · Member since 2016 · 88 posts · 3 votes
10y
Bill Exeter do I talk to a real estate lawyer ,cpa about this. ? Where do you suggest i get more info on this ?
0 Reply
Joshua D.
Investor · Columbus, MT · Member since 2013 · 1k+ posts · 1k+ votes
10y
@Cesar Ramirez
You are talking to THE guy you need to about a 1031 exchange. @Bill Exeter
Look at his logo on the page. 1031 exchange services.
I have never used him but based on the extremely helpful information that he gives here on the forums, I would say he is one of the best in his feild.
If you do use his service, post about it on the forums. I would be curious to see how it goes.
1 Reply
Lydia S.
Real Estate Agent · Albuquerque, NM · Member since 2015 · 542 posts · 193 votes
10y
@Cesar Ramirez
Congratulations on your new baby! Clearly it's not very easy for you to move into the property right now. Good luck!!
0 Reply
Cesar Ramirez
OP
Riverside, CA · Member since 2016 · 88 posts · 3 votes
10y
Thanks Lydia S. yea that's the main reason. Joshua D. I didn't even notice that I was Half asleep this morning. Bill Exeter i apologize
0 Reply
Cesar Ramirez
OP
Riverside, CA · Member since 2016 · 88 posts · 3 votes
10y
@Bill Exeter I'm in the process of rehabbing the house right now and looking into getting it on the market by mid November what direction would you point me in to start education my self in this 1031 exchange
0 Reply
Dave FosterBusiness Member
Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
10y
@Cesar Ramirez, You may have an issue with a 1031 on this property. Property that you have purchased with the primary intent of resale does not qualify for 1031 treatment. What you're describing with your remodel and sale is a fix n flip model. It would not qualify.
Qualifying property is property that you have purchased with the intent of holding for productive use in business, trade, or for investment.
The 1031 Investor5137 Reviews
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1 Reply
Bill ExeterBusiness Member
1031 Exchange Qualified Intermediary · San Diego, CA · Member since 2008 · 1k+ posts · 1k+ votes
10y
Hi Cesar,
The above comment regarding a problem does not apply to you. You bought this property as your primary residence, lived in it for one year, and then moved out and converted it into a rental property that you rented for 5 years. Your intent is clear that you have been holding the property as a rental property for quite sometime. Property acquired for rehab and then sale (flipping) does not qualify for 1031 Exchange treatment, but that does not apply to your situation.
Exeter 1031 Exchange Services, LLC and Exeter Trust Company4.726 Reviews
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1 Reply
Cesar Ramirez
OP
Riverside, CA · Member since 2016 · 88 posts · 3 votes
10y
Dave Foster I have owned the property for 6 years I lived in it for one year and rented it out for 5. Im rehabbing it now to sell the property. Since it was rented it needs a new kitchen and a few other things
0 Reply
Dave FosterBusiness Member
Qualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
10y
Ah my mistake. You're acting consistent with your usual buy and hold model. Certainly the 1031 would be appropriate for you.
The 1031 Investor5137 Reviews
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0 Reply
Curt Riffel
Accountant · Dallas, TX · Member since 2016 · 161 posts · 75 votes
10y
The fact that you lived there one year is inconsequential since it was over 5 years ago. In order to avoid capital gains tax for home ownership you must live in the house for 2 out of the last 5 years. The 1031 exchange sounds like the best option in this case.
0 Reply
Natalie KolodijBusiness Member
Moderator
Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes
10y
$150k in appreciation in 6 years is fairly substantial.
Are you sure the gain is calculated correctly including capitalized improvements, depreciation recapture ect?
(Not doubting you, they can just be tricky and wouldn't it be great if your tax burden wasn't that much??!)
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Cesar Ramirez
OP
Riverside, CA · Member since 2016 · 88 posts · 3 votes
10y
Natalie Kolodij yes I did not take account capital expenses. But I bought the house in 2010. For 170 I was throwing all the income from the rent back into it and then balance know is at 140 and some change. The house ARV should be between 280 and 300 so I'm trying to prepare for the best
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