1031Exchange
I am 1/3 owner of rental property A. I am selling another rental property, property B. I want to use the proceeds from the sale of property B to buy the other 2/3 share of property A to avoid capital gain taxation. Would this situation qualify for a 1031 exchange? Considering that I already own 1/3 of property A? I have spoken to a handful of tax advisors and even attorneys. All have said to cantact the IRS, which I did. The IRS "help center" said that this was too complicated for them and that I should write a letter to an office in Washington to set up a hearing on this "complicated" question. Does anyone have an answer for this?
I believe is possible. Wexter would know off the top of his head. Hang around here awhile.
Yes, you are in luck. It can be done, it is not complicated (the IRS help desk is not designed to answer specific questions on 1031 exchanges), and it is done quite a bit. You would sell your relinquished property just like an ordinary sale transaction with an Accommodator assigned into the transaction so that it is property structured as a like kind exchange (we would be happy to assist you). Once you have closed and the Accommodator is holding your proceeds, you would buy the 2/3 interest from the current owner just like any other regular purchase with the Accommodator assigned into the transaction as your replacement property. When you identify your replacement property during your 45 calendar day identification period you would specifically identify the 2/3 interest in the property. We handle these transactions all the time for clients.
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Thank you very much for your input. [ Edited by larrybird on Date 03/17/2005 ]