All Forum Posts by: Dat Nguyen

Thanks, @Dave Foster.  That's good advice on including rent on the 2021 tax return, to more clearly demonstrate investment intent.

We are three siblings, all listed on title for a home.  One sibling (single) lives in the home as a primary residence for the past 10+ years; the house has never been rented out.  The other two siblings have primary residences elsewhere.  We are selling the home, and looking for ways to reduce/defer capital gain tax.  We are considering:

1. The sibling who lives in the home will take the Section 121 exclusion to shield $250K of the gains from tax.

2. The rest of the gains will be distributed to the other two siblings, and they'll do a 1031 exchange to defer the tax on these gains.

Is this a legit way to split up the proceeds from the sale of the home?  The home has never been rented out, but can it still be considered investment property for the non-residing siblings?  I've read elsewhere about having to first convert a primary into a rental to take advantage of 1031 exchange; but in this case, that's not necessary since the home is already considered investment property for the non-residing siblings.  Is that interpretation correct?

We have 3 equal partners buying a property.  In the sales agreement paperwork, can we specify that each partner owns 33⅓%.  In other words, does the paperwork allow fractional percentages?  Or can we only have whole number percentages, such 34% to one partner and 33% to the other two?