MsTabbyKats Posted May 17, 2015 Report Share Posted May 17, 2015 I've done my research and can't find a thing about this.Client had a rental property for several years.....just sold it...with a very nice gain."Someone" told him that if he buys a new property within 6 months....he can avoid paying tax.Any truth to this? TIA Quote Link to comment Share on other sites More sharing options...
BHoffman Posted May 17, 2015 Report Share Posted May 17, 2015 It's called a 1031 exchange and you can read about it here: http://www.irs.gov/uac/Like-Kind-Exchanges-Under-IRC-Code-Section-1031Unless your client made arrangements for 1031 prior to the sale (usually with an exchange facilitator), the gain is taxable. 2 Quote Link to comment Share on other sites More sharing options...
jklcpa Posted May 17, 2015 Report Share Posted May 17, 2015 I've done my research and can't find a thing about this.Client had a rental property for several years.....just sold it...with a very nice gain."Someone" told him that if he buys a new property within 6 months....he can avoid paying tax.Any truth to this? TIAI agree that your client is referring to a 1031 exchange, and those have strict rules that must be followed as outlined in the IRS link provided in BHoffman's post.. If he took possession of the cash at sale, that would be a disqualifying event that would trigger gain recognition. Sec 1031 transactions use either a Qualified Intermediary or an Exchange Facilitator that receives the cash at sale, and the individual himself cannot act in this capacity. 4 Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted May 18, 2015 Report Share Posted May 18, 2015 Client: Hi I just did something big without checking with you first. Can you fix it?Pro: Not now. 8 Quote Link to comment Share on other sites More sharing options...
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