All Forum Posts by: David Lee

Thank you very much @Dave Foster and @Katie L..

Hi @Dave Foster

Thanks for the advice. That's good to know it's possible that I could be on the loan but not the deed.

What if I added my name now to the property, then waited 2 years to 1031? Though this might alert the county to a reappraisal. And maybe other problems?

When you said "others can counsel you better" - would you say I should look for a CPA, tax lawyer, or somebody else?

Thanks much!

@Mark Creason

From what I read, there were new rules in 2008 that you can't just move back in for 2 years and get 500k tax free? That's what some people were doing and they closed that "loophole."

http://www.floresattorneys.com/popup-newsletter.php?PageID=294798

https://taxmap.irs.gov/taxmap/pub17/p17-084.htm

Thanks!

@Mark Creason

Hi Mark,

Thanks. Yes, they rented it out the last 9, but they want to move back in to live as primary for the next 2 years, so at least they could get some exclusion. So in 2 years, they would have owned it for a total of 20 years, which I understand 9/20, or 45% of the profit they will still need to pay taxes.

My parents are open to doing a 1031, but they have no income, so won't qualify for any loans. I will need to be a co borrower if a 1031 is even possible.

Also, ultimately, if they are able to 1031 with me on the new property, they don't want their names on the deed or loan in the near future (~ 5 years). They're getting old and don't want the responsibilities of being a landlord.

Thank you!

Hi,

My parents own a rental property that is paid off and they are thinking of selling it. However, I'm not sure if 1031 is possible or better.

Option 1: they lived there as primary residence for 9 years, then rented it out for 9 years. They are thinking to move back in to get some exclusion, so 9 rental/20 total ownership years is 45% non qualifying use. Purchase price $250k, sell price $700k, depreciated $80k. So if they sold they would have a profit of $450k * 45% so $202.5k + 80k they would need to pay taxes on - so about $60k in federal and state taxes.

Option 2: 1031 the $700k, but I would need to be on the new home deed to qualify for the loan. Ultimately, within a few years, they do not wish to have their names on the new home title or loan as well. Is this a possibility to 1031 into 3 borrowers - mom, dad, son? Can I add my name into the property now, and then 1031 into a new rental property?

Any other good options other than simply selling?

Thanks much!