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Is It Possible To Do A 1031 Exchange On A Property Which I Plan To Sell With Lease-option / Owner Financing?

I hаνе a property/home іn whісh I аm putting οn thе market. If I sell thе property οn a lease-option tο bυу οr owner financing, wουƖԁ I still bе аbƖе tο ԁο a 1031 exchange? If ѕο, thеn hοw аnԁ whеn (upon signing thе contract οr pay-οff (2 years))?
Please include details іn уουr аnѕwеr.
I саn аƖѕο add details іf more info іѕ needed tο thе qυеѕtіοn.

5 Responses to “Is It Possible To Do A 1031 Exchange On A Property Which I Plan To Sell With Lease-option / Owner Financing?”

  1. I believe 1031 status takes effect when the 1031 trustee recieves the proceeds.

  2. A 1031 exchange is premised on like for like property. The title of the property must be exchanged. When you do a lease option you are merely granting the equitable title in the property not the legal title, if the option is exercised by the renter and you do a land/real estate contract. I would recommend that you seek a 1031 realty agent specializing in such exchanges since it is very complex and if done incorrectly you can be severely punished on your taxes.
    Here is some additional information that you might want to read up on
    Property Exchanges 1031, 1033, 1034, 721 & 121
    a simple explanation (private site)http://www.transunionexchange.com/overvi…
    Best of luck on your sale and research

  3. No because the property you are selling won’t pass title to the buyer until a first mortgage is secured by the buyer ( 2 years later). The property isn’t sold until the title is recorded under someone else’s name.

  4. check this link its good
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  5. The IRS does not allow a 1031 exchange on a property sold under lease to own options. There are strict time frames involved in order for the deferment of the tax liabilities of any capitol gains under this program. I have put a website below to hopefully give you more information.

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