Exchange Involving Lot Adjacent To My Home
My primary residence is waterfront. The lot to my immediate east is for sale. Both lots are approximately 40,000 square feet apiece. I want to buy the lot and have new surveys for each property and take approximately 5,000 square feet from the vacant lot and add it to mine. Zoning is R-15 so there is no issue there. Without going into all the details, by removing several large trees and dozens of large bushes my view will be enhanced tremendously. Also, due to the unusual shape of my lot, the 5,000 additional SF will make my yard far more appealing, while having a minimal impact on the vacant lot. I intend to sell another water lot I own in another town and do an exchange to buy the vacant lot next to mine. My question is this, if I buy the vacant lot while doing a reverse exchange, will changing the size of the lot and adding it to my primary residence lot be legal? The legal descriptions of both lots will stay the same, but the sizes and values will certainly change. Something tells me the IRS might consider it mingling investment property with primary residence and void it.
Bargain King you’re correct about the IRS and I intend to proceed even if an exchange isn’t possible. Funny how the mind works, I was relaxing on my deck with a cold one on the 4th and an idea came to me which is similar to deals I’ve done in the past. I’m going to see if I can have the owner agree to sell me an additional 5,000 SF in one contract, then record new surveys and deeds for both properties, then buy the lot via an exchange with a separate sale for the remaining SF of the site. I may not be able to close it all in one closing and there may be a delay of a few days. With CAMA red tape and zoning hurdles tossed it, it will be fun. It seems with the more government red tape involved, the highest profits are made from being able to legally navigate the minefields placed in front of us.