Legal Question in Real Estate Law in Texas

Complicated 1031 transaction

My father owns (outright) a rental property in CA. He is selling it and will do a 1031 Exchange for a property in TX, where my husband and I will set up residence. I realize that to comply with the exchange, we will need to 'rent' the property from him so that it is a 'like exchange,'- no problem. My question is, if his current property sells for say, $350K, and we find a house for $400K, can my husband and I get a mortgage for the difference if my father agrees, and will it in any way effect the 1031 transaction? My concern is that I do not want my father to be taxed. It appears that the 1031 Exchange gets tricky if it isn't black and white. Also, will adding my and my husband's names to the deed help or hinder, or will it be indifferent? I should also add that currently there is a living trust on the property in question, and I am named on it.


Asked on 2/07/06, 11:53 pm

1 Answer from Attorneys
Jeffrey Hacker Law Offices of Jeffrey R. Hacker, PC

Re: Complicated 1031 transaction

You're actually asking a number of rather complicated questions. First of all, who owns the California real estate - your dad or his Living Trust? Second, if he buys the property in Texas, how are you expecting to be on the deed? He certainly can invest in another property, and he may not necessarily have to own 100% of one, but otherwise there could be problems.

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Answered on 2/08/06, 9:25 am


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