Sale of CA 1031 exchange rental after moving
While living in CA in 2017 taxpayer obtained a rental property located in OR via a 1031 exchange of a CA property. Later in 2017 taxpayer moves to OR. In 2018 taxpayer sells the OR rental obtained via the 1031 exchange.
My understanding is that in 2018 the taxpayer would have to report CA income equal to the deferred gain from the 1031 exchange. However, in 2018 OR will also require that the taxpayer report the income in OR (taxpayer was an OR resident in 2018 when the property was sold).
I'm thinking the income should be reported in on both CA and OR returns in 2018. But on the CA return the taxpayer can claim a credit for the taxes paid in OR and therefore there will be no taxes due in CA. Is this correct?
Also, as I understand, the holding period of a property given up in the 1031 exchange carries over to the property received. So even though the taxpayer held the OR property for less than a year, the gain is still a long term gain (as long as the combined holding period of the old and new properties is longer than one year). Correct?
I'm new to TaxBook, but have heard very good very positive comments about it. Glad to be here.
While living in CA in 2017 taxpayer obtained a rental property located in OR via a 1031 exchange of a CA property. Later in 2017 taxpayer moves to OR. In 2018 taxpayer sells the OR rental obtained via the 1031 exchange.
My understanding is that in 2018 the taxpayer would have to report CA income equal to the deferred gain from the 1031 exchange. However, in 2018 OR will also require that the taxpayer report the income in OR (taxpayer was an OR resident in 2018 when the property was sold).
I'm thinking the income should be reported in on both CA and OR returns in 2018. But on the CA return the taxpayer can claim a credit for the taxes paid in OR and therefore there will be no taxes due in CA. Is this correct?
Also, as I understand, the holding period of a property given up in the 1031 exchange carries over to the property received. So even though the taxpayer held the OR property for less than a year, the gain is still a long term gain (as long as the combined holding period of the old and new properties is longer than one year). Correct?
I'm new to TaxBook, but have heard very good very positive comments about it. Glad to be here.
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