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Repair Costs Preparing Property for Sale

Last post 08-23-2007 2:51 PM by Bill Exeter. 1 replies.
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  • 08-23-2007 11:15 AM

    • renewbie
    • Top 10 Contributor
    • Joined on 07-20-2007
    • Springfield, New Jersey
    • Newbie
    • Points 92

    Repair Costs Preparing Property for Sale

    i am getting my first property ready for sale to exchange.  i have to fix it up to get it ready for sale.  can i have these costs paid to me at the close of the transaction?

    • Post Points: 5
  • 08-23-2007 2:51 PM In reply to

    Re: Repair Costs Preparing Property for Sale

    No. 

    These expenditures will either be repairs and maintenance related and are operating expenses related directly to the property and would be deducted on your income tax return as repairs and maintenance expenses, or they will be considered capital expenditures and would be added to the cost basis of your property.

    The payment of these expenses out of your net proceeds (1031 exchange proceeds) would create taxable boot because you have used your 1031 exchange proceeds to pay for costs that are not related to the acquisition of like-kind replacement property. 

    William L. Exeter
    President and Chief Executive Officer

    EXETER 1031 Exchange Services, LLC
    A Qualified Intermediary (Accommodator) for 1031 Exchanges

    EXETER Fiduciary Services, LLC
    A Private Professional Fiduciary Services Company

    http://www.exeter1031.com
    http://www.exeterdst.com
    • Post Points: 1
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