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Has anyone ever done this, know anyone who has or some insight.
We own land and someone wants to exchange for like land (apples for apples exchange). We would like to build primary residence on the replaced property.
Not immediately. You are supposed to be exchanging investment property for investment property. If you build a house for yourself, you are trading investment for owner occupied. Id love to sell a rental and usee the money to build a house for myself. Not allowed.
However, if you exchange investment for investment, you are allowed to convert the replacement to personal use after a time period, which isn't actually specified. Some guess one year, some guess two years. IRS is silent on the matter
I suggest a short consultation with an accountant who specialises in real estate taxes.
When I read the rule it does indicate waiting 2 twelve month periods. In the article they used an example of exchanging for a rental and then using that rental for primary residence.
I will be contacting an attorney but want to be able to ask good questions during consult.
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