Hi Tom, I meant does the paying down principal count as a “like-kind exchange”? More specifically, would it defer capital gains tax per the 1031 code? It’s my understanding that I can’t use the 1031 exchange to defer capital gains if I use rental property profits to buy anything other than a rental property within 1 year of sale.
My overall line of questioning is, if the profits do tax defer, and that 2nd rental property was once my primary residence in which I lived in for at least 2 of the last 5 years, can I defer capital gains completely on the 1st property if I pay down principal on, then sell, the 2nd property?
