I currently own a rental property but would like to sell due to a number of factors with the property. I have been searching for a replacement property but there is not much for sale presently.
I would like to do a 1031 exchange to avoid paying taxes on the sale of the property. If I am not able to find a replacement rental property in the allotted time, would buying the stock of a REIT qualify as a 'Like-Kind' exchange? Do I have to replace my real property with real property that I own? What options, outside of paying the taxes, are available as a temporary measure until I find a good replacement property?
I realize that I could wait to list my current property until I make an offer on another property, but I have no guarantee that my property will sell within an acceptable time frame to a seller.
Found this on irs.gov, but I was not sure if it meant stocks are exempt when trading stocks or completely exempt as not eligible under any circumstance.
Finally, certain types of property are specifically excluded from Section 1031 treatment. Section 1031 does not apply to exchanges of:
- Inventory or stock in trade
- Stocks, bonds, or notes
- Other securities or debt
- Partnership interests
- Certificates of trust