"Norma Desmond" <ND[at]ND.com> wrote:
- quote -

I forgot she wanted to do that. What she really wants to do
is to stay in her home, sell her rental property and pay
down the mortgage on her residence with the money. I can't
think of any way to do that.

Stu

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

"Stuart A. Bronstein" <spamtrap[at]lexregia.com> wrote in
- quote -

yes, you can, but only if each of the properties qualifies
for 1031 treatment. Her personal residence, which status is
not going to change, does not.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << It may not be relied upon for the purpose of avoiding > << penalties that may be imposed on the taxpayer or the > << tax preparer. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

"Mike Lewis" <jmpj[at]cableone.net> wrote:
- quote -

I think his real question was whether someone can take
several properties and do a 1031 exchange so that she ends
up with only one property at the end.

I suspect the answer is yes, but I don't know for certain.

Stu

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << It may not be relied upon for the purpose of avoiding > << penalties that may be imposed on the taxpayer or the > << tax preparer. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

"Adam Cole" <foozle[at]foozlesnark.invalid> wrote:

- quote -

That makes no logical sense to me. An LLC can file as a
partnership (with 2 or more members) or a c-corp or s-corp.
If filed as a partnership or s-corp, the capital gain flows
right thru the house owners' personal return in the year of
sale. If a c-corp, it GETS NO CAPITAL special rate, so could
be taxed at a rate from 15-39% depending on net income.

Also, renting property from a controlled entity has several
obstacles to hurdle to even be considered an arms length
transaction..ie, the rent charged must be same as an
unrelated party would pay, etc....

mike lewis, cpa

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << It may not be relied upon for the purpose of avoiding > << penalties that may be imposed on the taxpayer or the > << tax preparer. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

I have a retired friend who's asked me if there's a way to
consolidate her multiple real estate holdings into equity in
a single property without paying taxes on gain.

She currently lives in house A and rents house B, recently
acquired via 1031 exchange of a third long-term rental. So
ordinarily the sale of B would trigger recognition of
significant gain and depreciation recapture.

She isn't willing to live in house B for 2 years before
selling. She intends to stay in house A permanently and
would like to pay down her mortgage on that property. A
friend of hers has recommended that she transfer houses A
and B to an LLC and pay rent to the LLC, then sell B and
draw a salary from the LLC. Friend claims that she would
not have to pay capital gains tax.

Is there some legitimate way to do this or some variation of
it? (It would seem to entirely circumvent the 2-year/$250K
rule, so I'm a bit skeptical.) Are there other tax
consequences inherent in the LLC part of the deal?

thanks,
Adam C.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << Copyright (2005) - All rights reserved > << ------------------------------------------------->