Stuart A. Bronstein wrote:

- quote -

Good point. Like with some people I know, "basis" is
carried over (inherited) but character is not.

Actually though, if not converted immediately to personal
use property, it would still be "capital" in nature. the
one year rule only determines short or long.

ChEAr$,
Harlan

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"Phil Marti" <prm20871[at]verizon.net> wrote:
- quote -

That raises another question. When someone takes property
in a 1031 exchange, is the new property immediately capital
gain property just because it has a carryover basis, or does
it have to be held a year to qualify?

Stu

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"Wayne Rivers" <wayne[at]wayneriverscpa.com> wrote:

- quote -

Selling on an installment agreement is irrelevant. The
seller REALIZES gain at the time of sale; he does not
RECOGNIZE the gain, however, until he collects the principal
is paid. So, in this case, the gain is realized in January
and would be considered a disposition at that time.

Lanny K. Williams, CPA
Nawarat, Williams & Co., Ltd.
Income Tax Services for Expatriate Americans

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"Wayne Rivers" <wayne[at]wayneriverscpa.com> wrote:

- quote -

Perhaps among those who don't understand that a 1031
exchange is a deferral, not a forgiveness, of tax on your
gain on the original sale.

You may be confused by people who want to do a 1031 exchange
and then move into the new property. That's a no-no. You
may, however sell the second property the day after you buy
it without any problem.

--
Phil Marti
Clarksburg, MD

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I know that if you do a 1031 exchange of property, it is a
good idea to hold the new property for at least a year
before disposing of it. I don't believe this is in writing
anywhere, but is the general consensus.

However, if someone does a 1031 exchange of rental property
in September 2005 and then sells the house on an installment
sale to the renter in January 2006, recognizing capital gain
as principal is paid, would this be considered a disposition
for 1031 purposes? Any idea on what the IRS might say on
this?

Thanks

Wayne Rivers, CPA

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