1031 Exchange

[Kram BergGold]

My client did a 1031 exchange in 2004. The property was rented from then till March 2008 (just under 4 years). In mid 2008 they moved into the house. Now they are going to sell the house and want to know if they can do a 1031 exchange. What controls here, the current use as their primary residence whihc means not eligilble for 1031 or the almost 4 years of rnetal use?

[Roland Slugg]

In general, predominate use of relinquished property is determined based on the 2-year period that ends when the property is relinquished. (Code §1031(h)(2)(B))

[Davc]

In general, predominate use of relinquished property is determined based on the 2-year period that ends when the property is relinquished. (Code §1031(h)(2)(B))

That section is about determining whether or not personal property is considered predominately used in or outside the US.

1031(h) Special Rules For Foreign Real And Personal Property
For purposes of this section—
1031(h)(1) Real Property
Real property located in the United States and real property located outside the United States are not property of a like kind.
1031(h)(2) Personal Property
1031(h)(2)(A) In General
Personal property used predominantly within the United States and personal property used predominantly outside the United States are not property of a like kind.
1031(h)(2)(B) Predominant Use
Except as provided in subparagraphs (C) and (D), the predominant use of any property shall be determined based on—
1031(h)(2)(B)(i)
in the case of the property relinquished in the exchange, the 2-year period ending on the date of such relinquishment, and
1031(h)(2)(B)(ii)
in the case of the property acquired in the exchange, the 2-year period beginning on the date of such acquisition.
1031(h)(2)(C) Property Held For Less Than 2 Years
Except in the case of an exchange which is part of a transaction (or series of transactions) structured to avoid the purposes of this subsection—

[solomon]

My client did a 1031 exchange in 2004. The property was rented from then till March 2008 (just under 4 years). In mid 2008 they moved into the house. Now they are going to sell the house and want to know if they can do a 1031 exchange. What controls here, the current use as their primary residence whihc means not eligilble for 1031 or the almost 4 years of rnetal use?

Rev. Proc. 2008-16

[Kram BergGold]

Thanks Solomon

Solomon the Rev Proc you provided is great, unfortunatley it does not help my client as during the 12 months before the exchage will take place the use of the house will be about 50-50 maybe 70-30 between rental.and personal days at best.
I'll have to do some research to see if there are any cases on point.

[S T]

One of our Posters

is a 1031 Exchange Expert

Not sure if this post will assist but here is the link http://www.thetaxbook.com/forums/sho...ghlight=exeter and here I think is his website http://www.exeter1031.com You could also probably private email him through the Board

Sandy

[solomon]

Solomon the Rev Proc you provided is great, unfortunatley it does not help my client as during the 12 months before the exchage will take place the use of the house will be about 50-50 maybe 70-30 between rental.and personal days at best..

Yeah, I know - was just ruling out the safe harbor.