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ScottyMacESQ
ScottyMacESQ, Lawyer
Category: Real Estate Law
Satisfied Customers: 15761
Experience:  Licensed General Practice Attorney, Texas
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If I want to reinvest money from the sale of an investment

Customer Question

If I want to reinvest money from the sale of an investment property, does the full amount of the sale need to be reinvested in another investment property or can only the capital gain be reinvested?
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  ScottyMacESQ replied 1 year ago.
Thank you for using JustAnswer. I assume that you're talking about a 1031 tax deferred exchange. 1031 requires complete reinvestment of the proceeds (the entire equity, not just the gain) for there to be a tax deferral. Now there are methods to do a partial exchange, where you do get some money out, but it would only be recommended to have a partial exchange if the money being taken out is less than the full capital gains (as you're going to be paying taxes on those gains that you take out). In other words, you get taxed first, not last, so you can't designate the reinvested monies as the "gain" that you had (unfortunately). Hope that clears things up a bit. If you have any other questions, please let me know. If not, and you have not yet, please rate my answer AND press the "submit" button, if applicable. Please note that I don't get any credit for my answer unless and until you rate it a 3, 4, 5 (good or better). Thank you, ***** ***** luck to you!
Expert:  ScottyMacESQ replied 1 year ago.
Did you have any other questions before you rate this answer?
Expert:  ScottyMacESQ replied 1 year ago.
Did you have any other questions before you rate this answer?
Expert:  ScottyMacESQ replied 1 year ago.
Did you have any other questions before you rate this answer?
Expert:  ScottyMacESQ replied 1 year ago.
I see that you have not responded in some time. Please note that this question is still open until you rate it. I believe that I have answered your question, but if you have any other questions, please let me know.If not, and you have not yet, please rate my answer. Please note that I don't get any credit for my answer unless and until you rate it a 3, 4, 5 (good or better). Thank you, ***** ***** good luck to you!

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