Tax Tuesday Episode 147: Selling Rental Property as a 1031 Exchange

Can you sell your rental property as a 1031 exchange? It depends. Toby Mathis and Jeff Webb of Anderson Advisors answer your tax questions. Submit your tax question to taxtuesday@andersonadvisors.

Highlights/Topics:

• Can I offer my condo as a rent-to-own rental for six months and sell it as a 1031 exchange? If you’re offering the condo as rent-to-own, you’re contemplating the sale of that property, so it becomes a sale property, not a rental property, and taxed differently
• Should I invest into limited partnership (LP) multifamily syndications with the same LLC as I have active personal rentals? Ideally, everything should be in its own LLC or you may be at risk for outside liability
• I am a co-founder of a startup (C Corp). Can I establish a self-directed Roth IRA and put my company share in it? Yes, you can, but it depends on how you go about doing it - Rollover as Business Start-ups (ROBS)

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Resources:

Infinity Investing: How The Rich Get Richer And How You Can Do The Same by Toby Mathis

http://aba.link/infinitybook

1031 Exchange

https://www.irs.gov/pub/irs-news/fs-08-18.pdf

IRS - Section 168

https://www.irs.gov/pub/irs-drop/rr-14-17.pdf

IRS - Section 179

https://www.irs.gov/newsroom/irs-issues-guidance-on-section-179-expenses-and-section-168g-depreciation-under-tax-cuts-and-jobs-act

Bonus Depreciation

https://www.irs.gov/newsroom/new-rules-and-limitations-for-depreciation-and-expensing-under-the-tax-cuts-and-jobs-act

Depreciation Recapture

https://www.investopedia.com/terms/d/depreciationrecapture.asp

Entity Formation

https://andersonadvisors.com/entity_formation/

Cost Segregation Authority

https://costsegauthority.com/

Real Estate Professional Requirements

https://www.irs.gov/pub/irs-utl/33-Real Estate Professionals.pdf

Airbnb

https://www.airbnb.com/

Retirement Plans

https://andersonadvisors.com/retirement_plan/

Wills and Trusts

https://andersonadvisors.com/living_trusts/

Tax Reform Act of 1986

https://www.investopedia.com/terms/t/taxreformact1986.asp

Self-Employment Tax

https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes

Old Age, Survivors, and Disability Insurance (OASDI)

https://www.ssa.gov/policy/docs/progdesc/sspus/oasdi.pdf

Capital Gains and Losses

https://www.irs.gov/newsroom/capital-gains-and-losses-10-helpful-facts-to-know-0

Section 121 - Capital Gains Exclusion

https://www.irs.gov/taxtopics/tc701

Step-Up in Basis

https://www.investopedia.com/terms/s/stepupinbasis.asp#:~:text=A%20step%2Dup%20in%20basis%20is%20the%20readjustment%20of%20the,for%20tax%20purposes%20upon%20inheritance.&text=The%20asset%20receives%20a%20step,of%20property%20transferred%20at%20death.

Fannie Mae

https://www.fanniemae.com/

Freddie Mac

http://www.freddiemac.com/

Schedule A

https://www.irs.gov/forms-pubs/about-schedule-a-form-1040

Schedule C

https://www.irs.gov/forms-pubs/about-schedule-c-form-1040

Schedule E

https://www.irs.gov/forms-pubs/about-schedule-e-form-1040

Schedule K-1

https://www.irs.gov/forms-pubs/about-schedule-k-1-form-1065

Unrelated Business Income Tax (UBIT)

https://www.irs.gov/charities-non-profits/unrelated-business-income-tax

Unrelated Debt-Financed Income (UDFI)

https://www.irs.gov/pub/irs-tege/eotopicn86.pdf

Rollover as Business Start-ups (ROBS)

https://www.irs.gov/retirement-plans/rollovers-as-business-start-ups-compliance-project

IRC 469(c)7

https://www.law.cornell.edu/uscode/text/26/469

Secure Act

https://www.congress.gov/bill/116th-congress/house-bill/1994/text

Toby Mathis

http://tobymathis.com/about-toby-mathis/

Anderson Advisors

https://andersonadvisors.com/

Anderson Advisors Events

https://andersonadvisors.com/all-events/

Events@andersonadvisors.com

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https://andersonadvisors.com/asset-protection/

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https://andersonadvisors.com/tax-wise-workshop-for-businesses-investors/

Anderson Advisors Infinity Investing Workshop

https://andersonadvisors.com/investing-workshop-passive-income-generating-machine/

Anderson Advisors on YouTube

https://www.youtube.com/channel/UCX5nh607M8hSBLiMB9MgbIQ

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Anderson Advisors Podcast

https://andersonadvisors.com/podcast/