We are in the process of selling a piece of rental property (home) to my son. We want to reinvest the gain into another more valuable rental unit. How do we go about this? I understand that we must set up something called a section 1031. What is this? We don't want to pay in any capital gains on this property and have something else to reinvest in soon after this sale is complete. Any help or suggestions would be much appreciated.You report like-kind exchanges on Form 8824. That form and instructions are available at the IRS website http://www.irs.gov/forms_pubs/index.html (or directly, here: http://ftp.fedworld.gov/pub/irs-pdf/f8824.pdf). The instructions give you an overview of the requirements. However, especially if you have a significant amount of money involved, you'll probably want to enlist the help of an attorney or CPA or both with experience in such transactions.
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