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Second opinion] I have a tax law question regarding sale of…

Second opinion] I have...

Second opinion] I have a tax law question regarding sale of real estate in California, and the 1031(b) regs.

Accountant's Assistant: Because real estate law varies from place to place, can you tell me what state this is in?

California. And this is a tax law question.

Accountant's Assistant: Has any paperwork been filed?

No.

Accountant's Assistant: Anything else you want the lawyer to know before I connect you?

I am thinking of selling my rental property, which I was given by Deed of Gift by my uncle. I want to use part of the proceeds to purchase another rental, using the 1031(b) section of the IRS code. I want to know :if the cost of the new rental would be shielded from Federal and State Taxes under that section. I realize the cash portion I retain would be subject to tax, but don't know about the portion that is used to purchase new property.

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Answered in 2 hours by:
9/8/2017
Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 6,417
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
Verified

Welcome to Just Answer. My name is ***** ***** I will be happy to assist you.

For both federal and CA, you can use the 1031 exchange to defer capital gains on the purchase of the new rental.

CA does not follow federal guidance only when the replacement property is located in another state.

Please let me know if I can assist you further.

Thank you and best regards,

Barb

Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 6,417
Experience: 20+ years of experience in tax preparation; 30+ years of experience as a real estate/corporate paralegal.
Verified
Barbara and 87 other Tax Specialists are ready to help you
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