First, the transaction--as you've described it--doesn't appear to satisfy the guidelines for a 1031 exchange, although you could tweak things a bit to structure your transaction to comply with the guidelines. However, before I proceed, I STRONGLY recommend that you hire an agent that specializes in handling 1031 exchanges. There are several things that you have to do within certain periods of time, and your transaction will be disqualified if you don't adhere strictly to the schedule.

Second, your question is the wrong one in a way, because you'll end up selling one property and buying another property with the proceeds (and possibly additional cash if necessary) from the sale to qualify as an exchange. Stated another way, if you already have 2 properties right now, then you'll end up with 2 properties--only one of them is a different property--if you opt to pursue a 1031 exchange.

William,

The answer is dependent on what your real estate goals are, and how the transaction(s) is/are structured. Your accountant will be invaluable in guiding you. A 1031 Like Kind Exchange has very specific rules and guidelines, and the transaction must meet strict criteria.

Cheryl Lyon
Coldwell Banker Residential Brokerage--Utah
801.633.6855
cheryl.lyon@utahhomes.com