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Old 02-07-2019, 08:50 AM
  #21  
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Originally Posted by Fatherof4 View Post
Am I reading you right, in that, if I own a vacation home now, selling it. If I buy another vacation home, use it strictly as a rental for 2 years, then I can sell it and not have capital gains taxes?
Yes sir. Any real property rented for 14 days a year and not used by you for more than 14 days a year for the past two years can be traded for any real property that you must rent for the next two years for more than 14 days a year and not used by you or your family for 14 days a year. This will avoid all capital gains tax. I'm considering doing it as a way out of a multifamily that I'd have to pay 80k in taxes on in New Orleans. I could also buy a laundromat if the property was included, or hunting land that I would lease for two years. Any real property.

Thanks everyone for the replies. :D
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Old 03-04-2019, 07:59 PM
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Just to clear this up...and I am NO professional at this, but a 1031 Exchange basically just postpones tax liability. Yes, you are getting away with not having to pay taxes on the property you just sold, but when you sell the new property (purchased with the proceeds from the property you originally sold) you will owe capital gains taxes on it.
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Old 03-05-2019, 10:30 AM
  #23  
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Originally Posted by SHANE704 View Post
Just to clear this up...and I am NO professional at this, but a 1031 Exchange basically just postpones tax liability. Yes, you are getting away with not having to pay taxes on the property you just sold, but when you sell the new property (purchased with the proceeds from the property you originally sold) you will owe capital gains taxes on it.
You Are correct. However, if someone (like me) wanted to sell a property and buy a beach house or even a new house, one could use a 1031 exchange and forego CG taxes provided that they used the new beach house as an investment for the next two years. To qualify as an investment property, you have to rent it 14 days a year for 2 years and you can't stay in it more than 14 days.
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Old 03-06-2019, 08:12 AM
  #24  
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Originally Posted by SHANE704 View Post
Just to clear this up...and I am NO professional at this, but a 1031 Exchange basically just postpones tax liability. Yes, you are getting away with not having to pay taxes on the property you just sold, but when you sell the new property (purchased with the proceeds from the property you originally sold) you will owe capital gains taxes on it.
Yes at some point....maybe.....but tax rates change with politicians and who knows what the rate would be tomorrow? Who knows if someone got in office and changed the tax code on real estate gains and cut it in half. If you can avoid paying the taxes and use the money for another investment that can generate you income or for your personal use, the wise thing to do it avoid paying taxes.
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