|
Here's our senario and would appreciate any advice on 1031 exchange
possibility:
We have two homes in N. California , one primary SFH with substantial
equity and higher price (calling house 1) and one SFH rental property
with high equity and moderate price (calling house 2). We will be
approaching retirement within 2-9 years (early retirement by most
standard) and would like to relocate to a less crowded area with more
land.
We rent house 1 for two years and simultaneously move into our rental
property-house 2 for 2 years. During this period we will do more
renovation of house 2. After two years, we do a 1031 exchange on house
1. With the price we anticipate to get, we purchase two homes. One in
Washington island area (house 3)and another in Oahu, Hawaii (house 4).
I picked Hawaii because of rising real estate price in Oahu as well as
good rental income in Hawaii. Our goal is to move to Washington home
as our primary home upon retirement. We again rent these homes. After
two years, we move into Washington home (house 3) and sell house 2 that
we have been living for 4 years (prior to this a rental) and
renovating. We get a capital gain exclusion of $500K and pay tax on
difference on house 2. We still keep house 4 on Oahu as a rental for
income flow.
Is this feasible? I really do not want to sell house 2 (our rental
property) and get hit with high taxes again.
Thank you.
|
|
1031 Question and Advice
