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LawTalk
LawTalk, Attorney
Category: Real Estate Law
Satisfied Customers: 35309
Experience:  I have 30 years legal experience. Additionally, in CA I held a Real Estate Broker's license.
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I have a property in miami beach, florida that I am selling

Customer Question

I have a property in miami beach, florida that I am selling and have a contract on a lake property.
The miami beach, florida was my college apartment for over five years and then it has been empty and rented for the past six years.
the new lake front property is for both personal and rental use, but we want to use it more for vacation time as my daughter can not travel away from emory in Atlanga, GA due to her heart condition.
do i have to pay capital gains if i sell and buy within the same month?
Submitted: 4 months ago.
Category: Real Estate Law
Expert:  LawTalk replied 4 months ago.

Good afternoon Barbara,

I'm Doug, and I'm sorry to hear of the confusion. My goal is to provide you with excellent service today. I am a GA licensed attorney.

Because you do not plan to use the lake property for business but for part personal use and possibly a possible rental, you cannot engage in a traditional 1031 exchange that would allow you to exchange one property for the other and potentially avoid paying any capital gains taxes at this point in time.

Because you are taking a rental and replacing it with a vacation home, you will unfortunately have to pay capital gains taxes on the sale of the Miami Beach property. The only way to avoid that tax now would be for you to move into the property for at least 2 years and use it as your primary residence before you closed on a sale.

I understand that you may be disappointed by the Answer you received, as it was not particularly favorable to your situation. Had I been able to provide an Answer which might have given you a successful legal outcome, it would have been my pleasure to do so.

If you have additional questions, you may of course reply back to me and I will be happy to continue to assist you further until your questions have been answered to your satisfaction.

Would you please take a moment to positively rate my service to you based on the understanding of the law I provided by clicking on the rating stars---three stars or more. It is that easy. That is the way I am compensated for having helped you.

Thank you in advance. I wish you the best in your future,

Doug

Expert:  LawTalk replied 4 months ago.

Good afternoon,

This seems like a very crucial matter for you, and your questions and issues suggest that an in-depth conversation might best suit your needs. If you are interested, for a very nominal charge I can offer you a private phone conference as opposed to continuing in this question and answer thread which is searchable and viewable by the public.

If I have already provided you with the information you asked for, would you please now rate my service to you so I can be compensated for assisting you?

Thanks in advance,

Doug

Expert:  LawTalk replied 4 months ago.

Hi Barbara,

You asked: What if we put it as a rental originally? We also use it as a vacation home for the summer and holidays? Will this be the same? I mean like on Vrbo or airbnb and have it managed accordingly or by a management company for those weeks we are not at it? It will be likely part of the year for week, weekend, or daily rental?

Only a purely business purchase can be a tax deferred exchange for another business property. You have converted your Miami Beach house to a business property---having rented it out all these years. But you cannot now use a 1031 exchange for a property that will be mixed business and personal use.

A 1031 exchange cannot be made on a property that is not used exclusively as an investment/business. The fact that you plan to use it yourself will eliminate the ability to do the tax deferred 1031 exchange.

You may reply back to me using the Reply link and I will be happy to continue to assist you until I am able to address your concerns, to your satisfaction.

Please remember to rate my service to you so that I can be compensated for helping you. Thank you in advance.

I wish you and yours the best in 2016,

Doug

Expert:  LawTalk replied 4 months ago.

Hi Barbara

Is there anything else that I can assist you with this afternoon?

Doug

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