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Buying new rental prop before selling existing
We want to avoid taxes on sale of existing rental which has appreciated almost 100% in the five years we have owned it.
We might need to complete the purchase of the intended replacement before the sale of existing is final. Is there a provision for tax avoidance when the replacement property is bought PRIOR to sale? We own only one rental property and will still have only one when we complete this deal. Reason, obviously, is to improve cash flow, ROI. Thanks for any help or opinion. Essayons |
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Essayons:
What you propose to do is a tax-free exchange. Look up "1031 exchange" on the Internet to get the details. You will need professional tax and real estate help to makethis happen, and it HAS to be done exactly right for it to pass muster with the IRS. |
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