Author Topic: 1031 exchange advice needed from experienced mustachians  (Read 1438 times)

FIKristen

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1031 exchange advice needed from experienced mustachians
« on: December 29, 2014, 05:15:23 PM »
Help needed from someone with a bigger mustache than mine! 

I recently took Mr Money Mustache's advice and moved myself to a better place - from the East Coast haze to the beautiful foothills of Colorado.  I managed to purchase a condo at the bottom of the real estate market in early 2012 for $50k, and that condo has happily nearly doubled in value.  However, I like managing property myself instead of paying someone else to do it for me, so I'm planning to sell it in 2015 put it toward the purchase something here in Colorado instead.   

I've heard of this fancy little trick called a 1031 exchange whereby one can actually avoid paying hefty capital gains taxes if you put the proceeds into a new investment, but I understand that I will need an intermediary to do it for me/handle the funds. Can anyone give me some tips for how to go about finding a company to handle the 1031 exchange for me? For example, do I need to find someone in the state in which I plan to purchase, or does that not matter?  Does it cost a few hundred dollars to hire someone to do this, or a few thousand?  Ideas, tips, and recommendations welcome! 


escolegrove

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Re: 1031 exchange advice needed from experienced mustachians
« Reply #1 on: December 30, 2014, 12:50:10 AM »
I did one for my family last year. We sold one property and turned it into 3. It cost approx. $750 a transaction (don't quote me). It was a great deal. You need to find a transaction coordinator for your state. I went to the

A few thoughts
* self management from across the country is possible if you wish. We do it :)
*If you lived in the house there is the 2 out of 5 years rule for capital gains. That you can get up to 250k of capital gains exempt if you have lived in the house for 2 of the past five years. So how long was it a personal versus rental.
*It needs to be a rental for at least one years
*We found our coordinator by calling our title company who our realtor recommended and asking you they used the most often.

These are just "thoughts, a CPA is a great source to make sure you do everything correctly.

FIKristen

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Re: 1031 exchange advice needed from experienced mustachians
« Reply #2 on: January 21, 2015, 07:53:23 AM »
Thank you!  Great advice.