All Forum Posts by: Kyle Kadish

As @Christine Kankowski points out, do not consider the type of investment. Instead, look at the use.  If you purchase a 50 unit trailer park as an investment, it would be treated the same as a multi family or strip mall.

Purchase the replacement as Tenants in Common.

Might be able to use a deferred sales trust in this situation.  Works well with second homes, or residence with gains over exclusions limits, or other highly appreciated assets.  Strategy has been used for nearly 25 years.

You can use principles from the installment sale, specifically Deferred Sales Trust, in this situation.

@Tony Dalton  Deferring taxes is one of the benefits of conducting and exchange.  The reasons why investors do so are completely different.  

I often work with individuals who reposition to a different property type or geography that might have more of an upside than where they originally owned.  Others are looking for greater cash flow, while many seek to retire from active management.

@Lexi Teifke is spot on with financing. 

That is correct.  

If you were conducting the the exchange on your own, you could sell property A and purchase property B under the same name.  Adding a taxpayer, if held in joint tenancy, would not be allowed in an exchange because Property B's ownership would differ.

Tenants in Common allows individuals to have an undivided interest in property.  Your interest can be funded through your exchange, and your son's can be paid with cash (or financed, or what ever arrangement exists).

Upon exit of Property B, you each can do whatever you wish with your proceeds as well.

@Robert Seger. The basis carried over to you since it was gifted, not inherited. If you sell, the gains and depreciation are on you. A 1031 is worth exploring.

The costs associated with a 1031 exchange are usually between $1000-$2000 for the exchange itself.  Those numbers can vary based on the number of transactions and dollar amount.  @Dave Foster could provide more info more data on that.

@Roland Rohde points to the challenge of finding replacement property(ies) within the 180 day timeline...it is possible to do, and they occur often.  

Factoring your tax liabilities and transaction costs will help you better understand if the strategy makes sense for this situation.

@Devin Londo As @Sam Shueh hints, the objective of an exchange is to match dollar amounts, not properties. If looking at lower price points, you could purchase multiple properties -with a purchase price adding up to exchange amount. The 45-days come quickly.

@Karla Slyngstad A Delaware Statutory Trust qualifies for an exchange, and most have debt at or near 50%. In your situation, and speaking in general terms, a $400k equity investment would include a $400k debt position, satisfying $800k in an exchange. The debt is at the trust level, and non-recourse to the investor.