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Does 1031 Work For Those Working From Home?
Are you eligible for a tax-deferred exchange if you use a portion of your residence for investment purposes or for productive use in a business or trade? Yes, you are. All you have to do is pay capital gains tax on the sales amount for the residential portion of the house and invest the remaining in a tax-deferred exchange.
For example, if you use one-fourth of your house for business purposes, and you sell your residence for $500,000, you can defer tax on $125,000 by investing the amount in another property that is worth $125,000 or more. You will have to use the replacement property for business or investment purposes.
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