Recently, we had a client come to us with an interesting 1031 exchange situation. This client owns a camp ground and wants to do a 1031 exchange. However, he lives on a portion of the camp ground. Is it possible to do a 1031 exchange in this situation? In this article, we are going to dive into this 1031 exchange case study and talk about the seller’s options.
Camp Ground 1031 Exchange
When sellers live on a portion on the real estate that they are exchanging, 1031 exchanges can get a little tricky. In this particular instance, the seller would want to allocate the gross purchase price into three or more categories:
1031 real estate
121 principal residence (which must be reasonable and substantiated)
Non-1031 personal property, goodwill and equipment (sell for remaining book value)
Memorialize this allocation in a written agreement between buyer and seller.
1031 Exchange Professionals
At CPEC1031, our 1031 exchange professionals have over twenty years of experience facilitating exchanges of real property for clients across the United States. Our team can walk you through each and every step of the 1031 exchange process. We can also prepare your documentation and answer all of your burning questions. Contact us today to set up a time to chat with one of our 1031 exchange professionals. Our primary office is located in downtown Minneapolis, but we work with clients throughout the country.
Start Your 1031 Exchange: If you have questions about 1031 exchanges, feel free to call me at 612-643-1031.
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