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Lane
Lane, JD, CFP, MBA, CRPS
Category: Capital Gains and Losses
Satisfied Customers: 10122
Experience:  Have been providing Financial and Tax advice for 30 years.Concentration in Corporations, Estate, Income Tax and Business Planning
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Can you obtain an extension on time to reinvest profit from

Customer Question

Can you obtain an extension on time to reinvest profit from selling a 7 unit rental apartments. My mother who was owner (88 yo) lived in one unit and was critically ill, renal failure and heart failure. She has been unable to invest in another property; she is dependent on daughter for most of her basic needs. I would appreciate any input
Submitted: 2 months ago.
Category: Capital Gains and Losses
Expert:  Lane replied 2 months ago.

Hi. My name's Lane. I can explain this for you.

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What you're referencing is IRC §1031.

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In a section 1031 exchange there are two time limits that apply (I hope this might work for you)

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The first limit is that you have 45 days from the date you sell the relinquished property to identify potential replacement properties.

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The second limit is that the replacement property must be received and the exchange completed no later than 180 days after the sale of the exchanged property or the due date (with extensions) of the income tax return for the tax year in which the relinquished property was sold.

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You can read more about this from IRS here:https://www.irs.gov/uac/like-kind-exchanges-under-irc-code-section-1031

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I hope this might apply.

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Please let me know if you have ANY questions at all, before rating me

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I hope you’ll rate me (using those stars, or faces on your screen, by clicking submit) based on thoroughness and accuracy, rather than any good news / bad news content. Otherwise I’ll receive no compensation for the work here.

Thank you!

Lane

I have a law degree, (Juris Doctorate), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in financial accounting & tax, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, since 1986.

Expert:  Lane replied 2 months ago.

P.S. - If this DOESN'T apply, your mother will still get the lower long terms capital gains rates.

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Long-term gains are taxed at

  • 0% if taxable income falls in the 10% or 15% marginal tax brackets
  • 15% if taxable income falls in the 25%, 28%, 33%, or 35% marginal tax brackets
  • 20% if taxable income falls in the 39.6% marginal tax bracket
  • 25% on Depreciation Recapture

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Lane

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