How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask TJ, Esq. Your Own Question

TJ, Esq.
TJ, Esq., Attorney
Category: Real Estate Law
Satisfied Customers: 9697
Experience:  Licensed to Practice Law
9373668
Type Your Real Estate Law Question Here...
TJ, Esq. is online now
A new question is answered every 9 seconds

I have an offer to sell my interest in a REIT. I also own a

Resolved Question:

I have an offer to sell my interest in a REIT. I also own a rental condo in Florida. Can I use the money I receive from the sale of the REIT to pay off a higher interest second mortgage on the rental property in Florida without having to pay taxes?
Submitted: 10 months ago.
Category: Real Estate Law
Expert:  TJ, Esq. replied 10 months ago.
Hello and thank you for the opportunity to assist you. My name is XXXXX XXXXX I will do my very best to answer your legal questions.

You would only need to pay taxes if you had capital gains from the REIT. For example, if you paid $50,000 for your interest in the REIT, and you sold it for $75,000, then you had $25,000 in capital gains, and you'd need to pay taxes on that $25,000. On the other hand, if you sold your interest in the REIT for $50,000, then you'd pay no taxes at all because you had no capital gains.

As an aside, the fact that you'd use the money to pay down a mortgage on rental property is not a factor as to whether or not you'd pay taxes.

Does that answer your question? Please let me know if you need clarification, as I am happy to continue helping you until you are satisfied. Also, your positive feedback is greatly appreciated. Thank you for using our service!

If you would like to direct additional legal questions to me in the future, then please type "To TJ, Esq." in the subject line of your question.
Customer: replied 10 months ago.

The more important question for me is whether or not it is legal to do a 1031 swap from the REIT to pay the second mortgage on the rental property we already own. In this case I believe I would not have to pay taxes on the capital gains.

Expert:  TJ, Esq. replied 10 months ago.
Hello again.

Unfortunately, what you describe would not be eligible for a 1031 exchange. First and foremost, your interest in the REIT is not likely the type of property that qualifies. Section 1031 states in part:

(2) Exception This subsection shall not apply to any exchange of— (A) stock in trade or other property held primarily for sale, (B) stocks, bonds, or notes, (C) other securities or evidences of indebtedness or interest, (D) interests in a partnership, (E) certificates of trust or beneficial interests, or (F) choses in action.

Second, what you describe is not an exchange. You'd be selling an investment to pay down a debt.

I wish that I had better news, but I do not believe that Section 1031 helps you to avoid taxes in this situation.
TJ, Esq., Attorney
Category: Real Estate Law
Satisfied Customers: 9697
Experience: Licensed to Practice Law
TJ, Esq. and 4 other Real Estate Law Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
< Last | Next >
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
  • My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer. Eric Redwood City, CA
  • I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight. Michael Wichita, KS
  • PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent. Three H. Houston, TX
  • Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!! Elaine Atlanta, GA
  • It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem. Tony Apopka, FL
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
 
 
 

Meet The Experts:

 
 
 
  • Tina

    Lawyer

    Satisfied Customers:

    4813
    16 years of legal experience including real estate law.
< Last | Next >
  • http://ww2.justanswer.com/uploads/MU/multistatelaw/2011-11-27_173951_Tinaglamourshotworkglow102011.64x64.jpg Tina's Avatar

    Tina

    Lawyer

    Satisfied Customers:

    4813
    16 years of legal experience including real estate law.
  • http://ww2.justanswer.com/uploads/LA/lawpro/2012-6-25_171315_PT206740s.64x64.jpg Law Pro's Avatar

    Law Pro

    Lawyer

    Satisfied Customers:

    6227
    20 years extensive experience in real estate law, foreclosure, finance, and landlord tenant law.
  • http://ww2.justanswer.com/uploads/BA/barristerinky/2012-6-10_22423_office.64x64.jpg Barrister's Avatar

    Barrister

    Lawyer

    Satisfied Customers:

    4966
    13 years real estate, Realtor. Landlord 24+ years
  • http://ww2.justanswer.com/uploads/LA/LawTalk/2012-6-6_17379_LawTalk.64x64.JPG LawTalk's Avatar

    LawTalk

    Attorney

    Satisfied Customers:

    4446
    I've more than 27 years legal experience. Additionally, in CA I held a Real Estate Broker's license.
  • http://ww2.justanswer.com/uploads/RA/rayanswers/2012-6-7_23346_Untitled1.64x64.jpg Ray's Avatar

    Ray

    Lawyer

    Satisfied Customers:

    4030
    Texas Attorney for 29 years dealing in real estate
  • http://ww2.justanswer.com/uploads/PH/philip.simmons/2012-6-7_161915_BIGPhilipSimmons.64x64.jpg P. Simmons's Avatar

    P. Simmons

    Lawyer

    Satisfied Customers:

    2377
    12+ yrs. of experience including real estate law.
  • http://ww2.justanswer.com/uploads/mnphillips2/2009-03-13_203105_10984459-249293407.jpeg Phillips Esq.'s Avatar

    Phillips Esq.

    Attorney-at-Law

    Satisfied Customers:

    2355
    B.A.; M.B.A.; J.D.