close
    When selling a house and you make a profit, how many days do you have before you need to reinvest the money you made?

    Do you have to reinvest?  If so, can I reinvest in the stock market rather thn buying another house?

    +1  Views: 470 Answers: 1 Posted: 12 years ago

    1 Answer

    A section 1031 tax deferred exchange is a way that real estate owners can sell investment real estate and buy a replacement property deferring both the capital gains as well depreciation recapture tax.


    The 1031 Exchange


    The IRS requires you to identify the property, or properties, that you will be buying within 45 days of the closing of your downleg property.  Most investors use the “Three Property” rule, which allows you to designate three properties of which you can buy one, two or three of them.  Other rules include the “200% Rule”  which allows you to identify as many properties as you want, as long as they do not exceed twice the value of the relinquished property and the “95% Rule” which also allows you to identify as many properties as you want, as long as you buy 95 per cent of them.  If you do not identify properties by the deadline, the exchange fails.  If you are unable to buy any of the identified properties, the exchange will also fail.


    Make sure you adhere to all deadlines set forth by the IRS. 



    Top contributors in Business & Finance category

     
    ROMOS
    Answers: 97 / Questions: 0
    Karma: 4305
     
    Colleen
    Answers: 215 / Questions: 0
    Karma: 4020
     
    Benthere
    Answers: 1 / Questions: 0
    Karma: 1905
     
    Ducky
    Answers: 35 / Questions: 0
    Karma: 1890
    > Top contributors chart

    Unanswered Questions

    Jun88 - Jun88one
    Answers: 0 Views: 23 Rating: 0
    taigo88rpro
    Answers: 0 Views: 16 Rating: 0
    SDFG
    Answers: 0 Views: 30 Rating: 0
    what is a waterdetector !
    Answers: 0 Views: 20 Rating: 0
    nguyendinhtuan
    Answers: 0 Views: 17 Rating: 0
    > More questions...
    450485
    questions
    719118
    answers
    745199
    users