1031 For Personal Residence???
My brother bought a condo 2 years ago and just bought/moved into a house. He sold his condo and is closing on it May 1. In 2 years he has built $50,000 in equity in this place and we are wondering if he could do a 1031 exchange with this money after the sale. Is this possible? Is it going to be taxed if he does nothing about it???
Thank you!
Matt
Did your brother occupy this condo as his personal residence?
If so, then it appears that he qualifies for the capital gains exclusion on the sale of a primary residence. This exclusion makes the profits earned on the sale tax free. An exchange only defers profits to a future date.
By the way, the answer to your basic question is NO. You primary residence is not eligible to participate in a 1031 exchange.