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Family member has a property they purchased in the 1980's, it needs a lot of repairs and isn't really ideal for renting so they were looking into making a 1031 exchange into another property, would 2 condo's in the same building qualify as "like kind property"?
If the property is then passed on and there is a stepup basis, would the inheritor still owe the initially deferred amount?
The definitions of "like kind" are quite broad, and frankly nearly anything can be done SO LONG AS there is always an separation of the proceeds, the "step-up basis" is a key part of allowing the heirs and originator of the exchange to avoid any taxation -- https://www.friedmanllp.com/insights...-planning-tool
Family member has a property they purchased in the 1980's, it needs a lot of repairs and isn't really ideal for renting so they were looking into making a 1031 exchange into another property, would 2 condo's in the same building qualify as "like kind property"?
If the property is then passed on and there is a stepup basis, would the inheritor still owe the initially deferred amount?
That's not really a Real Estate question, but a TAX question. I suggest reaching out to a qualified tax professional. They would be most qualified to answer.
Family member has a property they purchased in the 1980's, it needs a lot of repairs and isn't really ideal for renting so they were looking into making a 1031 exchange into another property, would 2 condo's in the same building qualify as "like kind property"?
If the property is then passed on and there is a stepup basis, would the inheritor still owe the initially deferred amount?
This is very simple to research. Lots of info on the web - lots of companies who specialize in 1031 Exchanges you can call and ask.
"Like kind" is commercial use (investment) property - but there are loopholes and complex issues that only a specialist can advise.
You can exchange any investment (property you have not had as a personal residence) for other income property as a 1031 exchange. However there are a few other requirements.
For a full tax deferred exchange, the property you are acquiring must be the same value or higher than the one you exchanged. If current property is more valuable there will be some tax consequences.
One of those properties can even be bare land, you held for appreciation or other profit, and the same for what you are receiving.
Location: Was Midvalley Oregon; Now Eastside Seattle area
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We had no issues from our advisors. Sold land and used the proceeds for down on a brand new construction for rental. I held back 5% for new property contingencies which we mostly used up in appliances, window blinds, to make it rental ready.
Heirs will receive property in a step up
We want the income and tax depreciation schedule.
New property worth more than old property.
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