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Basic Restrictions of 1031 : acquisitions

  A Few Restrictions to be aware of:

* You cannot purchase property owned by a related party unless that related party is also doing an exchange. In brief, related parties are yourself, your spouse, your children, and your mother, father, brother, sister (by whole or half blood), and your grandparents or entities where you have a 50% or greater ownership. If you do business with relatives, both buyer and seller must agree to hold their positions for two years following the transaction and file IRS form 8824 for the year of sale and the next two tax years.

* The new property must be titled in the same manner as the old property. The taxpayer identification number must be the same throughout the transaction;same person or persons, or same entity

* The new property cannot be used as your as your principal residence or for personal use upon acquisition. Personal use of the property is limited to 14 calendar days or 10% of the days actually rented, whichever is greater. The property can also be used during repairs or maintenance of the property, however, keep good records if you expect to support this claim in an audit. If you decide to rent to relatives, the rent must be fair market rent.

*The new property must clearly support the "Investment Intent" of the old property.

Replacement property choices can include: Whole or partial interests, property rights, easements, subsurface property, land improved or unimproved, single family, Multi-family, retail, commercial, warehouse, manufacturing facilities, strip malls, condominiums, and seasonal property..or any combination thereof.

I am mainly involved in the sale of Condominiums with active on site rental programs that fit the need for buyers wishing to fulfill the replacement property requirements but have also helped with land, strip malls, and apartment buildings.

Your White Mountain's of New Hampshire real estate professional : steve@alpinelakes.com

  Steve Loynd/ Managing Broker Alpine Lakes Real Estate, co inc. Lincoln NH  800-926-5653

 

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                                                                                                                                                                              Your-White Mountain New Hampshire real Estate Expert

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2 commentsSteve Loynd • June 27 2008 12:42PM
Basic Restrictions of 1031 : acquisitions
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A Few Restrictions to be aware of: * You cannot purchase property owned by a related party unless that related party is also doing an exchange. In brief, related parties are yourself, your spouse, your children, and your mother, father, brother,… more