I'm selling a rental property in Arizona and I'll be profits around $130k. I'm living in New Jersey now and looking at my options. If I were to take the profits from the rental property and do a 1031 exchange... can I live in the property as well as use it for business? Say airbnb or run my massage business out of it or my fiance's painting business or all three? Or it has to be fully a rental, is there a length of time that I can turn it into a primary residence? Also, would the new property need to be of equal to or great than the sale price of the sold property or just all of the profit?
Lastly, my income puts me in the 0% capital gains bracket, but from what I'm understanding I would still need to pay 15% on any profits that brings my income past $40,400. This is if I dont do the exchange of course. Do I have this right or no?
Thank you so much!
