If i sold a property and the money was held in a 1031 exchange can partial of the money be used to pay off an existing mortgage on my personal residence?
Is there a limited quantity of properties than can be bought with one 1031 exch.
Ex: I sold a 400K prop. and would like to buy 5 X 80K prop. Is this possible?
Yes, you can buy multiple properties, and they don't have to be the same type as what you sold. For example, you sell your $400K SFR and buy 2 $80K rentals, and a $240K quad (or commercial building or land or other real property).
The restrictions (as I understand them) are:
- that you have to exchange an equal amount of value ($400K) or more
- and you must take on at least as much debt. So, if you have $200K left on the existing mortgage, you must have at least $200K of mortgage(s) on whatever you buy.
- you have to identify what you want to buy within 45 days and close within 180 days.
- You can't buy a family member or friend's house, or your own.
- You can buy first, then sell, but it is a lot more complicated.
There are lots of good websites that explain it all. Your 1031 intermediary will guide you through all of it.
No, that would be considered taking constructive receipt of the proceeds, which would disallow the tax deferred exchange.
Is there a limited quantity of properties than can be bought with one 1031 exch.
Ex: I sold a 400K prop. and would like to buy 5 X 80K prop. Is this possible?
Yes, you can buy multiple properties, and they don't have to be the same type as what you sold. For example, you sell your $400K SFR and buy 2 $80K rentals, and a $240K quad (or commercial building or land or other real property).
The restrictions (as I understand them) are:
- that you have to exchange an equal amount of value ($400K) or more
- and you must take on at least as much debt. So, if you have $200K left on the existing mortgage, you must have at least $200K of mortgage(s) on whatever you buy.
- you have to identify what you want to buy within 45 days and close within 180 days.
- You can't buy a family member or friend's house, or your own.
- You can buy first, then sell, but it is a lot more complicated.
There are lots of good websites that explain it all. Your 1031 intermediary will guide you through all of it.
Peter