1031 Exchange and Tenants in Common
Hey all,
I live in a condo here in Southern California that I co-own with my parents as "Tenants in Common." They had a cabin property that they rolled over via 1031 exchange into this condo back in 2007. I put a small downpayment down towards the condo and took a private loan from them that I am paying them back for 25% ownership. This is my primary residence - my parents do not live here. It's just me, my wife and my kids.
We are considering looking for and moving to a single family home in a nearby area and I was wondering if we could go through the same or similar process where my parents would 1031 exchange their ownership in the current property towards a new property and where we would sell our ownership and apply the funds towards the downpayment, etc on the new property accordingly. Is this even possible to do? And if so, what is the process and or the details around it?
One consideration with all this is to avoid getting hit with capital gains taxes. I would assume the 1031 would account for that as far as my parents are concerned but not sure for us as far as our ownership (which would not be qualified as "1031" since this is a primary residence)
Does anyone have experience with doing something like this or suggestions?