Question

form 1031 or 1033

Forum|Forum|6 years ago
February 17, 2020
1 reply
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One of our rental properties was lost due to a fire. Insurance paid for loss and we sold property as-is. We want to roll the money over into another rental property so as not to have to pay capital gains taxes next year. Our understanding is that this is possible with a form 1031 or 1033 depending upon the circumstances. Since the loss of the property was "involuntary", we are thinking that we need to go the 1033 route but not sure and looking for some guidance.

LudwigVan_fan

Here are a couple of links to IRS publications that should help you out with your particular circumstances.

Pub 544 Sales and Other Dispositions of Assets. Note page 7 for involuntary conversions.

https://www.irs.gov/pub/irs-pdf/p544.pdf

This link takes you to discussion of Section 1031, Like Kind Exchange. I don't think you have a link kind exchange...since the source is the fire, I would say following the involuntary conversion rules would apply. But you can read further and see how your circumstances fit into the rules.

https://www.irs.gov/businesses/small-businesses-self-employed/like-kind-exchanges-real-estate-tax-tips

**Disclaimer: Effort has been made to offer correct information; but due to the discussion forum limitations, the poster disclaims any legal responsibility for the accuracy of the poster's response**