Legal Question in Tax Law in California

1031 exchange
Tex owns apartments in Texas, and she wants to sell them for $395,000. Cal wants to buy them, and wants to structure a 1031 exchange on a house he owns in California as part of the down payment. The house was purchased for $130,000 and is now worth $225,000. Cal�s basis is $113,000 with an existing loan of $118,000. Tex doesn�t particularly want the house, and Cal doesn�t particularly want to sell it. After the exchange, Cal can use the apartments to collateralize a loan for his equity to re-purchase the house from Tex. The current loan on the house is in Cal�s name, and Tex would assume this loan without a change in the titling of the note. During the re-purchase, Cal would refinance the house through a different lender, eliminating the currently existing note. Is there any time limitation on Cal�s re-purchase of the house from Tex? Or, is there any other restriction on the re-purchase of property involved in a 1031? Would the current note on the house need to be discharged during the 1031? Discuss fully. Yes, this IS a currently existing transaction. Thanx.

Asked on 4/01/02, 10:03 pm

Joel Selik www.SelikLaw.com

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Re: 1031 exchange

You need an expert in 1031 exchanges.

there are many attorneys and other companies that specialize:

http://www.e-realestate.com/http://www.apiexchange.com/

and there are many, many more.

Joel Selik

www.taxworkout.com

Answered on 4/02/02, 9:47 am

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