Skip to content
General Landlording & Rental Properties

User Stats

5
Posts
1
Votes
Peter Ivanov
1
Votes |
5
Posts

1031 exchange followed by a move in?

Peter Ivanov
Posted Jan 1 2020, 10:56

If we sell rental property A and buy a similar rental property B, can we move into it after renting it for a while (say, 1 year)?

Let's say we sell rental property "A" in 2020 with 500K profit but do it as a 1031 exchange and buy a similarly priced property B.  No taxes are paid.  We rent B for a year then move in and live in it for 9 years.  It appreciates significantly and we sell it in 2030 with 500K profit.  Can we (a married couple living together in B as primary residence and filing jointly) get 90% of that 500K profit tax free (only 90% because we rented it for 1/10 of the time).

What happens with the 500K profit from property A? .  Is it tax free?

Loading replies...