Question Details

W. Johnson, Home Seller in san francisco bay area

my primary home in San Francisco worth 2,000,000 has 1.250,000 equity. how can I start to set myself up for a?

Asked by W. Johnson, san francisco bay area Thu Jun 12, 2008

1031 exchange. I would like to trade this property for income property in Oregon

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Answers

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I presume you want to avoid paying the gain on the sale of the SF property.

If that is your intent I believe you will need to lease your primary residence for at least a two years for it to be considered investment property.

It might be to your advantage to just sell the SF property, buy the property in Oregon and take the tax hit at the current ordinary income tax rate.

Remember that there is an exclusion of $250,000 for a single person and $500,000 for a married person when calculating your capital gain.

And, your capital gain is the price you paid for the house less your current selling price regardless of the loans on the property.

Uncle Sam always gets his share unless you plan your moves to your advantage.

Best to talk to a tax professional and/or a financial planner for the best strategy.

Good luck!
0 votes Thank Flag Link Fri Jun 13, 2008
A 1031 Exchange is the selling of income property and taking the proceeds and buying other income (like) property or properties. Since it is your "primary" residence and you can sell the property and then buy income property in Oregon. Now, when you want to sell your Oregon income property, you will then be looking at a 1031 Tax Exchange.
0 votes Thank Flag Link Thu Jun 12, 2008
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