<daviddnv[at]yahoo.com> wrote:

- quote -

Basesd on what you posted the 1031 will not work. Ma issue.
Home would probably be considered NOT like kind and the
lower than market rent would definately kill it.

Regards,

Mark

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I'd like to get some opinions or options concerning a sale
of purchase of some rental property.

Here's my situation:

I'm planning to sell a small rental house that I have owned
for about 13 years within the next few months. I'm also
trying to purchase a condemned house (hurricane damage) that
is next to my primary residence which will probably take
place before the sale of my rental house. Once the
condemned house is torn down, I'm planning to build a small
house for my mother who is 75 years old and of limited
financial means.

The condemned house is not valuable, pre-say. The thing
that makes it valuable, as with everything, is that more
then one person wants it. There are 3 other bordering
property owners that might want it. So the purchase can not
be put off and will happen before the sale of my other
rental property.

My questions involve capital gain taxes and sale/purchase timing.

1. Can I do a 1031 exchange if the purchase of the
replacement property happens before the sale of the existing
property?

2. Can I do a 1031 exchange to build the house on property
already owned? So I would use the profit from the rental
house to build the new house.

3. I was planning on using the newly built house as a
rental, charging my mother rent, although somewhat reduced.
Is there another/better way to own this house other then as
an investment?

4. Are there any other options that I forgot?

Thanks in advance

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