A: The longer the better. Unfortunately, there is no safe holding period for property to automatically qualify for an exchange. Keep in mind, the property only needs to be "held for investment or productive use in trade or business" for it to be eligible for an exchange. Time of ownership is only one factor the IRS looks at when determining if the property was "held for investment". Some tax advisors recommend a minimum holding period of one year.

A: Certainly. Properties involved in an exchange need to be "held for investment or productive use in trade or business". Holding land for its future appreciation would be considered held for investment. Don’t get confused by the “like-kind” requirement. “Like-kind” can be any real property used for business or investment purposes within the U.S.

A: Yes - but not right away. Keep in mind that the IRS will look at your "intent" in determining if your exchange is valid. If the IRS feels your original intent when the property was initially acquired was to use it as a primary residence, you may have your exchange disqualified. To play it safe, rent the property out for as long as possible before moving in.

A: No. However, any cash (equity) that is not reinvested in real estate will be taxable (and is known as cash boot). The general rule of thumb if you don’t want to pay any taxes is to reinvest all of your cash and purchase a property equal or greater in value.

A: 180 days. However, also keep in mind you will be required to identify your potential replacement properties on day 45 of your exchange. Your timeline starts when you close escrow on the property you are selling.

A: As your Realtor I will make sure the sales contract is assignable by providing the  necessary language for the contract.