26 Sep 2007 07:31 am
Tax-deferred Exchange May Be Compromised By Slow Rental Market
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Having completed an Internal Revenue Code 1031 tax-deferred exchange, not beening able to rent the acquired house due to an oversupply of rentals in an area presents problems for maintaining the tax-deferred status. Rather, it would look to the IRS like you acquired the house with intent to make it your personal residence. Maybe the rent you are asking for the house is too high. Even if you have a negative cash flow for a while, that would be better than losing the tax deferral on the sale of your prior investment property. |
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