Atlanta Deferred Exchange
The ADE Difference


Atlanta Deferred Exchange

Is there a way to do a 1031 exchange transaction on a property that is part rental and part primary residence?

  Q: I am selling a triplex I primarily hold for investment, but I live in one of the three units. The contract price is $750,000. Am I eligible to do a 1031 exchange on this transaction?


A: Yes, you can. The unit that you are living in would be considered your primary residence. As long as you have owned and lived in the property for at least 2 of the past 5 years, you would be able to use the primary gain exemption on the sale of that portion of the triplex. (Under Section 121 of the IRC, the exemption is $250,000 if you are single and $500,000 if you are married). As the other two units are rental units, they would be treated as qualified property for a 1031 exchange.