Sell 2 rental properties that were part of a 1031 ...
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rlamoreaux1
Returning Member

Sell 2 rental properties that were part of a 1031 Exchange

I sold a house in Ca. for a large profit in 2005. I then bought 2 like houses in Las Vegas. Health now forces me to sell these 2 rentals and not do another 1031. How do I do the cost basis for the sold Ca house and bring it forward to the sale of the LV houses? Then, a (what if) sale of the 2 LV houses so I can figure out my capital gains tax.

3 Replies
martinmarks1919
Level 8

Sell 2 rental properties that were part of a 1031 Exchange

Did you do a 1031 in 2005 or not?  Was the house you gave up in 2005 a rental or investment property? Selling one house and then buying two like houses is not a 1031 exchange. Did you use a third party intermediary? You need a tax pro because you're not even asking the right questions.....like you don't "bring forward" the cost basis now when you're thinking of selling the 2 LV houses. You need to figure in depreciation deductions because there will be recapture if you sell the LV houses. See a tax pro ASAP.

rlamoreaux1
Returning Member

Sell 2 rental properties that were part of a 1031 Exchange

I do agree with the tax pro. I'm just trying to get a What-If and a How_much. To answer your questions.

Yes I did a 1031 in 2005 with a rental house in Ca. to 2 rental homes in LV. Yes I used an intermediary, Southwest Exchange, here in LV.

Thanks Bob

martinmarks1919
Level 8

Sell 2 rental properties that were part of a 1031 Exchange

Well, there's a couple of ways to deal with the depreciation after an exchange and you have to know which one you used and are using. This article explains it: https://www.fool.com/millionacres/taxes/depreciation/depreciation-after-1031-exchange-how-it-works/

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