1031 exchange:
Can I Rent Replacement Property to My Son?

I am 91. I will be selling a property thru a 1031. with some of the procedes i want to buy a house that i will rent to my son. when i pass will i be able to leave this property to my son? if so what tax liabilty will be incured beside inheretance taxes? Dear H: I have no problem with your plan with one caveat. I strongly recommened that your son pay fair market value as rent to you until your demise. If you 1031 exchange into a property, then rent to your son for less than FMV, the IRS could challenge the exchange, taking the position that you did not have investment intent when you purchased. Also show the new property on schedule E of your tax return. Please use us for your 1031 exchange. Sincerely, Steven W. Hickox, President 1031x.com.

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