Many people wonder if they can do a 1031 exchange with their primary home. In this article, we are going to talk about whether or not you can conduct a 1031 exchange involving your primary residence.
1031 Exchanges Involving Primary Residences
The short answer to the question at hand is no. All property used in a 1031 exchange must be held for either investment purposes or for use in your trade or business. Your primary residence is not held for such purposes – it’s held for personal use. As a result you cannot exchange your primary residence in a 1031 transaction.
There are certain situations in which you may be able to do a 1031 exchange with a property that was formerly your primary residence. For example, if you lived in a home for several years, and then decided to rent that property out after moving to another home, you may be able to do a 1031 exchange on the property. That being said, you would likely need to continue renting that property out for a considerable amount of time (at least a couple of years) before doing the exchange. These types of exchanges can get tricky so it’s important to work with a qualified intermediary who can walk you through the process and help you make informed decisions.
Work with a Qualified Intermediary at CPEC1031, LLC
It’s important to work with a qualified intermediary in any type of 1031 exchange (forward, reverse, build-to-suit) to ensure the successful deferral of capital gains taxes. At CPEC1031, LLC our qualified intermediaries have been providing services to taxpayers conducting 1031 exchanges for decades. Let us handle all the minutiae of the 1031 exchange process so you don’t have to. Our primary offices are located in downtown Minneapolis. Reach out today to see if your property is a good candidate for 1031 exchange.
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
Defer the tax. Maximize your gain.
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