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Avoiding capital gains tax querie?


I own two rental properties that I have never lived in. I want to sell one which has increased in value by 100,000 in past 3 years and roll the earnings into the other rental property. Could this be considered a like in kind exchange to help me avoid capital gains tax?

No, that won't work as a Like Kind Exchange. You'd have to find someone with a property that you wanted who wanted yours and then trade with them.

Property management firms sometimes have knowledge of their property owners who are interested in such an arrangement. It wouldn't hurt to call around.

Also, putting a rental unit on the market may attract LKE offers from other investors. I got 2 when I was selling an investment property last year.
No. That would be considered a sale, not an "exchange." Any capital gain would be taxable.

http://www.irs.gov/publications/p544/ch0...
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