0

I'm hoping to 1031 a rental property and then move into it myself for a bit. As far as I can tell this is fine, even when setting the mortgage to "primary residence" but how can I find out for sure? I want to make sure I don't bet hit with a minimum-wait before I can move in and work on the place etc etc.

The rental is in Utah but I'm not sure where I will be 1031ing to just yet.

Improve this question

1 Answer 1

Reset to default
2

You have an investment property so the "like kind" of a 1031 exchange would have to be another investment property. If you want to convert the new investment property into a principal residence and meet the IRS safe harbor, you'd need to rent the new place out for 2 years before converting it (see Moving into a 1031 Swap Residence). You could be more aggressive and move in sooner, forgoing the safe harbor, if you have other evidence that it was a bona fide investment property. But the existence of this question would cut against that possibility.

Improve this answer
3
  • Is there such a thing as an owner occupied rental? I suspect you would get taxed on the portion the owner assumes eg 50% tax credit for a duplex, 66% for a triplex, etc etc
    – Jacksonkr
    Commented Oct 18, 2022 at 14:05
  • 1
    @Jacksonkr - What tax credit are you talking about here? The capital gains exclusion for a primary residence? At some point, you'd realistically want to sit down with a tax professional to walk through your particular situation because this is not a particularly simple area of tax law.
    – Justin Cave
    Commented Oct 18, 2022 at 15:50
  • Excuse me, capital gains exclusion is what I meant. I have reached out to my CPA on this issue as well and am waiting their reply. In the meantime I have found an article that seems to corroborate your point quite well. Thanks @JustinCave
    – Jacksonkr
    Commented Oct 19, 2022 at 14:50

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .