"punjabi" <slow_pain_98[at]yahoo.com> wrote:

- quote -

I have read your question differently than the other
posters. I am gathering you are wondering about the
consequences of the sale of the replacement property on the
deferral of the gain from the original exchange.

Under 1031(a)(2)(A) " stock in trade or **other** property
held primarily for sale" [emphasis added] is not qualified
for the deferral of the tax on the gain. There is no
holding period requirement. The requirement is what was
your intent at the time of the exchange. If your intent was
to turn around and sell the replacement property immediately
(or perhaps you even had a prearranged sale setup) then the
original exchange does not qualify under 1031 and was
taxable on the date your old property was surrendered. If
your intent was to hold it for use in a trade or business or
for investment purposes then you should be ok. Since IRS
can't read your mind they use your actions to try to divine
your intent. So the immediate sale doesn't look good.

See Rev. Rul. 75-292 for a failed exchange. See Wagensen v.
Comr., 74 T.C. 653 (1980) for a transfer of the replacement
property shortly after the exchange that did not trigger tax
on the original exchange. I have not read either cite
recently and am relying on the digest provided by BNA.

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punjabi wrote:

- quote -

There is no waiting period. You can sell immediately. Your
tax liablity is determined by the amount and nature of any
gain on the sale.

Regards,
Bill

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"punjabi" <slow_pain_98[at]yahoo.com> wrote:

- quote -

You can sell it anytime you want, the consequences won't
change.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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punjabi wrote:

- quote -

The 1031 exchange does not exclude the gain from the
original property, it merely DEFERS it until you sell the
replacement property. Then you pay the capital gains tax
due.

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"punjabi" <slow_pain_98[at]yahoo.com> wrote

- quote -

You can sell the replacement property at any time after the
exchange is completed.

Just remember that you'll have tax to pay on the gain.

--
Paul A. Thomas, CPA
Athens, Georgia

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I just completed a 1031 exchange from one rental to
another...how long do i have to hold this new property
before i can sell it..is there a set period before i can
sell it..i can't find any info on it..one site said it's a
good idea to hold it for a year..i just bought it a month
ago...what are tax liabilities in this situation..

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