Can I 1031on my my investment profit if my tenants in common buis.partner doesn't want to with her half of $

My partner and I, tenants in common, have just finished a fixnflip property, we're 1 year into it, and want to sell now. I know, after 2 years, no capitol gains, but we're selling now. She wants to take her half of profit pay the capitol gains tax,then pay on car, credit cards ect., but I want to take my half of the profit and put it all into refinancing my allready owned condo with tax free 1031 exchange. Is this possible or does all the profit have to go either 1031 or taxed. Also, does the profited money get taxed after realtors are paid or before?

As a 1031 Accommodator with First American Exchange Company, one of the country's largest 1031 Accommodators, let me answer your question more fully.

There are many things that must be considered in your transaction before you consider doing a 1031 Exchange. First, the 1031 code says that you must hold the property "for productive use in trade or business or for investment" (IRC section 1031(a)(1)). Also, the code says that dealers cannot do an exchange. It sounds to me like you bought the property to sell it or "flip" it. If so, you do not qualify for 1031 since your intent when you bought it was not to hold it for "productive use in trade or business or for investment".

Secondly, even if you do qualify this property as an investment property, how do you hold title? If you and your partner both hold title as tenants in common with your own percentage interest, then at the closing each of you could do what you wanted. You could exchange and your partner could take her money. But remember, the exchange MUST be set up, in place with documents signed before the closing. You must contact a Qualified Intermediary before the transaction closes or it is too late to do an exchange.

Lastly, if you do an exchange, you must acquire property though the exchange of equal or greater value then the value of the property that you sold. For example, if the property being sold has a sales price of $500,000 and you own 50%, then you would have to acquire a property for at least $250,000 to defer your taxes. You cannot pay off a loan on a property that you already own. You must acquire new investment property through the exchange process

As an Accommodator registered in the State of Nevada, I help facilitate 1031 Exchanges in all 50 states. Nevada is the only state that requires registration of an Accommodator. In the other 49 states, anyone can become an Accommodator without bonding or any background checks. As an Accommodator with First American Exchange Company, a wholly-owned subsidiary of First American Title Company, your funds are guaranteed by First American Corporation, the largest title company in the industry, with a history dating back to 1889.

I hope this answers your question. If not, or if you have more questions, or if you would like more information, please contact me at pro1031@yahoo.com or go to my company's website at www.firstexchange.com.

Always remember, you should consult with your tax professional or attorney before ever considering a 1031 Exchange.

A flip isn't eligible for a 1031 exchange. Any gain on the flip is SELF-EMPLOYMENT income and subject to not only ordinary income tax but the 15.3% SE tax as well. This is true now, next year and the year after that.

Even if you take your gains and pay off your primary residence, the IRS doesn't care. You are still expected to pay income tax.

The sale of the flip is a partnership and should be reported ona 1065 return, with a schedule K-1 to each partner.