What alternatives are there to 1031 exchanges?

tldr
Are there any options for me to avoid paying taxes on a friendly sale of a home that is currently classified as investment income to a family member?

Situation
I own a house in a different state I want to sell to a family member. I have not lived in it for 2 of the last 5 years — I have rented in another state during that time period. I want to sell this house to a family member, and use that cash on a house in the state I currently reside in.

Summary of options

– 1031 exchange: If I were to exchange it I would have to rent out the house I want to live in here for 2 years, because of the rules of 1031’s. After 2 years I could make it my primary residence.

– Sell outright: This is the simplest option, but I will pay a good chunk of capital gains taxes (about half a years salary)

– What other options do I have? Given that I am selling my house to a family member I have complete trust in, are there some other sneaky options I could leverage to avoid paying the sales tax while making it a primary residence immediately? For example, selling the house to an LLC and buying a new house to put under the same LLC, then dissolving the LLC a few years later?

submitted by /u/hanzoffme_fe
[link] [comments]

tldr Are there any options for me to avoid paying taxes on a friendly sale of a home that is currently classified as investment income to a family member? Situation I own a house in a different state I want to sell to a family member. I have not lived in it for 2 of the last 5 years — I have rented in another state during that time period. I want to sell this house to a family member, and use that cash on a house in the state I currently reside in. Summary of options – 1031 exchange: If I were to exchange it I would have to rent out the house I want to live in here for 2 years, because of the rules of 1031’s. After 2 years I could make it my primary residence. – Sell outright: This is the simplest option, but I will pay a good chunk of capital gains taxes (about half a years salary) – What other options do I have? Given that I am selling my house to a family member I have complete trust in, are there some other sneaky options I could leverage to avoid paying the sales tax while making it a primary residence immediately? For example, selling the house to an LLC and buying a new house to put under the same LLC, then dissolving the LLC a few years later? submitted by /u/hanzoffme_fe [link] [comments]

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