1031 exchange moving states
I have a rental in South Carolina that used to be a primary residence before I moved to Texas. It has appreciated in valued considerably and I am curious of how the 1031 exchange works. If I sell it and buy like kind property in Texas, will I have to pay capital gains to South Carolina @ 15%? If so, what if I buy like kind property in South Carolina? Is like kind property residential rental property like I have right now or are there other investments types that would qualify?
Dear R: Thank you for contacting us. Here are the answers to your questions: 1) If you have lived in the SC property for two out of the last five years than you can sell it and claim tax exemption under IRC section 121. 2) Assuming that you moved to Texas more than three years ago then a 1031 will be a good idea. If you do not do a 1031x then you would pay state and federal income tax. 3) All real estate is "like kind" to all other real estate as long as it is held for investment. You can sell in SC and buy anywhere in the US that you want. We are looking forward to working with you. Sincerely
Dear R: Thank you for contacting us. Here are the answers to your questions: 1) If you have lived in the SC property for two out of the last five years than you can sell it and claim tax exemption under IRC section 121. 2) Assuming that you moved to Texas more than three years ago then a 1031 will be a good idea. If you do not do a 1031x then you would pay state and federal income tax. 3) All real estate is "like kind" to all other real estate as long as it is held for investment. You can sell in SC and buy anywhere in the US that you want. We are looking forward to working with you. Sincerely
Steve Hickox
Attorney / President
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