taxpayer owns a principal residence and two vacant lots. Now retired, taxpayer want to sell one of the two lots to build a vacation home on one of the lots he owns.
Is there a way to avoid paying the taxes on the sale of one lot, which funds will be used for the building of the vacation home on the other lot?
Read a bit more & you will see that § 1031's don't work for personal use property.
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"I have been reading the Like kind exchange 1031, but I really do not understand it. That is why I reached out to the community."
My favorite articles lately have been found on Investopedia:
1031: "Let's sell that marina and buy a shopping center."
Not 1031: "Let's sell a lot, buy a different lot and build a vacation home."
I describe it to my clients as "carrying over the invested value to the new project."
"I also believe you have to get a qualified intermediary for 1031 exchange but this is just my opinion"
That's not just opinion; you cannot touch the funds (needs to be handled as escrow) or DIY.
"Level Up" is a gaming function, not a real life function.