Asked by Jim S, San Jose, CA • Fri Jan 11, 2008
I am investor and have done standard 1031s. I have some negatives on my rentals. I am trying to improve my cash flow position by offering an owner carry on 95% of the mortgage at a good rate. Say for example I sold the place for $350k and asked for a $17k deposit and had a positive cash flow of $500 a month. Would only the cash flow and the $17k be taxable. Then when the note comes due in 24 months - could I 1031 to defer the cash or does the owner carry still trigger a full tax event against the $350k.
Any serious advise here would be greatly appreciated. I know I can call a 1031 company and speak to my tax man but I'd rather get some second opinions since I know this isn't the traditional way to do a 1031
Thank you for your hel
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