1031 exchange:
Repairs
I have a question related to this subject: If we are receiving a total of $100K from the sale of a Lake Property (Profit $70K), and we intend to purchase a commercial building for $75K. Can we apply $25K of the lake property sale toward a new roof on the purchased property and still defer all taxes related to the sale or do we have to choose a second piece of real estate to apply the remaining $25K?
Dear Anonymous: Thank you for contacting us. The IRS considers improvements made to a property after purchasing it to be outside the 1031x. (taxable). The best thing to do is to have the new roof put on prior to your purchase and have the roofing company paid as a debit off the sellers settlement statement. What you are really doing is raising the sale price to $100K and having the seller pay for the new roof. Does this work for you?
Sincerely,
Steve Hickox
Attorney / PresidentMore Info? Click here: http://www.1031x.com/
2120 S. Birch St.
Denver, CO 80222
888-899-1031
Email us with questions: infox@1031x.com
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