“I’m planning to exchange my San Diego rental house for an apartment building in Texas. I know there’s different kinds of exchanges. I heard I should do a Starker Exchange. What exactly is that?”
***ANSWER:
The name is from a 1979 court case: T.J. Starker vs. US. A Starker exchange is one name for a delayed exchange, the most common type of 1031 tax-deferred exchange of investment property. You close your sale, then close your purchase one to 180 days later and defer all your capital gains tax.
A tax advisor and a knowledgeable Realtor can help you comply with the IRS exchange rules. They’re much simpler than people think. But if you don’t follow them exactly, you’ll get hit with a big tax bill.
I’ve helped dozens of clients exchange and they go quite smoothly when handled correctly. If you have any questions, call me at (858)457-KENT.
