In a 1031 exchange, can you sell two properties and purchase a single replacement property? The short answer is yes – you can sell two relinquished properties and purchase one replacement property in a 1031 exchange.
However, for a 1031 exchange to be fully tax-deferred you need to buy a replacement property of equal or greater value than the sum of the two relinquished properties. So you could sell two duplexes and purchase a 12-unit building as your replacement property, so long as that 12-unit property is greater in value compared with your two relinquished properties. You want to buy up or equal in value and you want to reinvest all of your equity as well. Exchanging from multiple properties into a single property is actually quite a common 1031 tactic. In addition to the tax-saving benefits of any 1031 exchange, it’s a lot easier to consolidate your managerial attention on one big property than two smaller properties that might be spread out in different geographical areas.
Contact CPEC1031, LLC for 1031 Exchange Help
If you’re in need of assistance with your 1031 exchange of real estate, contact CPEC1031, LLC today. Our qualified intermediary team is here to help advise you on the best course of action for your exchange. We have over two decades of experience working with taxpayers on like-kind exchanges of all sizes. Let us answer your questions and help you defer your capital gains tax burden when selling investment real estate. You can find us at our Minneapolis offices to set up an appointment. We work with clients throughout Minnesota and across the United States.
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
Defer the tax. Maximize your gain.
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