ILLMAS Posted August 18, 2023 Report Share Posted August 18, 2023 TP bought an investment property to rent, improvements cost are getting out of hand and is running out of money. If the TP were to sell another investment in a 1031, can they invest the money in the money pit property? Thanks Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted August 18, 2023 Report Share Posted August 18, 2023 From what I understand you to say, they would sell the other property, take cash and invest in existing property. Not a tax free exchange. 1 Quote Link to comment Share on other sites More sharing options...
BrewOne Posted August 18, 2023 Report Share Posted August 18, 2023 the gory details are in Sec.1.1.1031(a)-1 of the IRC. This situation doesn't appear to involve an acquisition of real property, so I'd agree with Dan. Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted August 18, 2023 Report Share Posted August 18, 2023 13 hours ago, ILLMAS said: invest the money in the money pit Maybe they need to take a look at the big picture here. Are they better of pouring money into the pit, or generating cash by selling the property and paying taxes? Quote Link to comment Share on other sites More sharing options...
ILLMAS Posted August 18, 2023 Author Report Share Posted August 18, 2023 2 hours ago, DANRVAN said: Maybe they need to take a look at the big picture here. Are they better of pouring money into the pit, or generating cash by selling the property and paying taxes? The cost of the property plus improvements combined is around 350K, value of the property is around $700K and the monthly cash-flow once rented makes perfect sense. And there is no mortgage or debt on the property. Quote Link to comment Share on other sites More sharing options...
Lee B Posted August 18, 2023 Report Share Posted August 18, 2023 15 hours ago, ILLMAS said: TP bought an investment property to rent, improvements cost are getting out of hand and is running out of money. If the TP were to sell another investment in a 1031, can they invest the money in the money pit property? 2 minutes ago, ILLMAS said: The cost of the property plus improvements combined is around 350K, value of the property is around $700K and the monthly cash-flow once rented makes perfect sense. And there is no mortgage or debt on the property. I'm confused? Are these two different properties? Quote Link to comment Share on other sites More sharing options...
ILLMAS Posted August 18, 2023 Author Report Share Posted August 18, 2023 18 minutes ago, cbslee said: I'm confused? Are these two different properties? 18 minutes ago, cbslee said: I'm confused? Are these two different properties? Yes, sell one and use the funds to improve the second property. Quote Link to comment Share on other sites More sharing options...
ILLMAS Posted August 18, 2023 Author Report Share Posted August 18, 2023 I just spoke with a 1031 broker and it cannot be done since the second property was already bought. Quote Link to comment Share on other sites More sharing options...
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