I may have some equity in a home (not my residence, but a rental) that I will need to re-invest when I sell it. Does the purchase of a share in the co-op qualify for the 1031 exchange?
The accounting firm that the Coop has engaged made this response to the question. It is important that each shareholder consult with their tax specialists as each person will have their own set of circumstances.
“Remember that personal use property is not eligible for 1031 treatment. Other considerations: The reason for a 1031 exchange is to defer tax on a business or investment gain; the greater the gain, the greater the benefit. If the personal use portion of the property has been used as the primary residence for two years, the sale may qualify for Sec 121 treatment (exclusion of gain on the sale of a residence).”